It’s called the Purpose Bitcoin ETF (BTCC).
It gives exposure to the bitcoin price through a regular online broker.
It launched last Thursday on the Toronto Stock Exchange… making it the first bitcoin ETF to launch in the world.
Then a second Canadian bitcoin ETF, the Evolve Funds Group’s Bitcoin ETF (EBIT), launched a day later.
As you’ll see in today’s dispatch, this is a huge deal for the bitcoin megatrend I (Chris Lowe) have been tracking for you here at the Cut.
That’s because these Canadian ETFs will be trailblazers for bitcoin ETFs in the U.S. and elsewhere.
So if you’ve been watching the bitcoin price rocket from $4,970 to as high as $58,000 since its low last March… and you still feel it’s too late to profit… pay special attention today.
Colleague and world-renowned crypto investing expert Teeka Tiwari has long predicted that a bitcoin ETF would be the biggest event in bitcoin’s history.
It will make buying bitcoin as easy as buying a stock… and lead to a surge in demand the likes of which we’ve never seen.
ETFs stands for exchange-traded funds. They trade on an exchange like a regular stock. But they give you exposure to either a basket of stocks or a commodity such as gold.
As I’ve been showing you, there already are some funds that allow you to invest in bitcoin through your broker. The Grayscale Bitcoin Trust (GBTC) is the most popular.
But a bitcoin ETF differs from GBTC’s trust structure in two important ways…
First, a bitcoin ETF will closely track the quoted bitcoin price. GBTC tends to sell at a “premium” – or extra charge – over the quoted bitcoin price.
As I type, that premium is 12%. But it’s been as high as 132.6%.
Also, Grayscale charges an annual fee of 2%. By contrast, the two Canadian bitcoin ETFs charge annual fees of 1%.
If you invest $1,000 in BTCC, it uses these proceeds to buy bitcoin.
Then it securely stores that bitcoin through the Gemini Trust Company. It’s a licensed New York State trust company that stores bitcoin securely for large-scale investors.
As an investor, you own units of the ETF, which owns 100% physically settled bitcoin.
And as Teeka has been predicting, a bitcoin ETF will set off a tidal wave of new money flowing into bitcoin.
Here’s how he explained it to our Palm Beach Research Group folks at the start of 2018. That was right after the first big institutions started getting into bitcoin. Teeka…
Last month, the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE) launched bitcoin futures and options products. Massive institutional money has flowed into bitcoin since then.
For example, bitcoin’s price soared 25% the first week futures were traded. But that’s just an appetizer… The CME and CBOE just pave the way for what I think will be an even bigger event: a launch of a new bitcoin ETF.
That will be huge. An ETF will make it as easy to buy bitcoin as it is to buy a stock. With just one mouse click, you’ll own bitcoin.
What we’re witnessing is a one-off shift in market structure. Easier access to bitcoin means more folks will buy it. And because there is a limited supply of bitcoin, that means the price must rise.
Here’s what he told his readers in the same insight at the start of 2018…
Once we get an ETF, bitcoin can easily go to $100,000 per coin. Here’s why… It’s going to be so easy to buy bitcoin that all the money on the sidelines will come in. It’s going to become a portion of just about everyone’s asset allocation.
And there just aren’t enough bitcoins to go around. Teeka again…
About 18.5 million bitcoins have been mined so far out of the 21 million that will ever be mined. But about 3.7 million of those have been lost because people lost the “private key” needed to access them. So there are about 14.8 million bitcoins in circulation today.
There are about 46 million millionaires in the world. Most of them are going to want a bitcoin in their portfolio. But there’s a problem. There are roughly three times as many millionaires as there are bitcoins. So, they can’t all have one.
Long story short… everyone is going to try to squeeze into this market. The price will skyrocket once bitcoin becomes easy to buy.
I wouldn’t be surprised to see bitcoin at $100,000 within months.
And that’s only going to be the start of an even more spectacular run higher. Teeka is on record in these pages predicting $200,000 bitcoin over the medium term.
These price targets may sound like a lot of money.
But think of it this way.
Right now, bitcoin has a market value of roughly $1 trillion. That’s roughly one-tenth the value of all the above-ground gold in the world.
If bitcoin catches up to the gold market in terms of size, that implies a bitcoin price of $540,000.
If the bitcoin market reaches only half the size of the gold market, that implies a bitcoin price of $270,000.
So $200,000 bitcoin is actually conservative.
For more on how to buy your first bitcoin, check out our free special report here.
Just remember that bitcoin can be one of the most volatile assets on the planet. So don’t invest more than what you can afford to lose. And hold for the long run.
I’ll have more for you later this week on why U.S. regulators won’t be far behind their Canadian counterparts in greenlighting a bitcoin ETF.
Regards,
 |
Chris Lowe
February 22, 2021
Bray, Ireland