More than a year ago, BlackRock launched a spot Bitcoin ETF in the U.S. following approval from the SEC. The iShares Bitcoin Trust ETF, under the ticker IBIT, smashed industry records. In just 11 months, it reached more than 50 billion U.S. dollars in assets, becoming what’s known as the greatest launch in ETF history. Now, BlackRock is expanding access to its digital asset platform with the launch of the iShares Bitcoin ETF in Canada.
Introducing the Canadian Bitcoin ETF
Joining us to discuss this exciting development is Robert Michnac, Head of Digital Assets for BlackRock. Hi Robert, thanks for being with us.
Good morning, Mark. Thanks for having me on. The Canadian version of the ETF invests in the U.S. version and it has the same ticker. So, how would you describe it? How is it differentiated?
Really, this is about widening access to our Bitcoin ETF offering for Canadian investors. This is a TSX-listed product, which invests in the U.S. as the underlying asset. We’re very excited to offer what has been a very successful and well-received product in the U.S. in the Canadian context now.
The Strategic Partnership with RBC
Now you’ve partnered with RBC on this ETF. What’s the importance and significance of that strategy?
This partnership is part of our overall strategy in the Canadian ETF landscape. This is really just an extension of that, and we’re excited to expand the platform to include this Bitcoin offering now.
Why Enter the Canadian Market Now?
You’re not first to market in Canada, but it’s often just as good to come later and be better. We know others are in the field, so why now? Why is this an opportune time?
We’ve been having conversations with investors across the world in response to the launch that happened in the U.S. in January of last year. We’ve come to understand the various ways our clients on a global basis are thinking about Bitcoin, particularly the ETF market. Canada is a market where we feel there’s significant opportunity. Despite several incumbent products, we believe that similar to the U.S. market, where ten competitors launched simultaneously, the value proposition of a BlackRock product is compelling.
Advantages of a BlackRock Bitcoin ETF
The BlackRock product benefits from the expertise and track record of the world’s largest ETF manager. Combined with the investments we’ve made over multiple years in our digital assets capabilities, it’s a compelling value proposition. Additionally, the liquidity that our TSX listing provides is significant.
The Choice of Exchange
Why was the TSX exchange chosen for listing?
We evaluate multiple factors when considering product listings and exchange partnerships. We have products across various exchanges to make them as accessible as possible, similar to our approach in the U.S. However, the CBOE made a lot of sense for us in Canada.
Investor Benefits
What are the advantages for an investor buying into this Bitcoin ETF?
We’ve seen this resonate with all types of investors in the U.S. over the last year. The ability for many investors to access Bitcoin exposure in a turnkey, convenient, and efficient manner through this product is significant. We have priced it at the low end of the fee range, making it cost-effective compared to the costs investors have historically faced when developing their own crypto trading arrangements. This simplicity and ease of access have resonated well in the U.S., and we’re excited to offer it in Canada now.
Competitive Pricing
Robert, what is the fee, and is it competitive?
We’ve priced it at the low end of the range, at 0.2% annually.
Portfolio Integration
Although you’re not a portfolio manager, how would you say this Bitcoin ETF can fit into someone’s portfolio, particularly for DIY investors?
We recently released a report addressing this question, as it’s on the minds of a significant percentage of our clients. Bitcoin has grown into an asset of increasing prominence, now a two trillion-dollar asset by market cap. For those who believe in its increasing adoption, adding a 1-2% allocation to a portfolio is a reasonable starting range. Bitcoin has the potential to be a unique diversifier; historically, it has been largely uncorrelated with traditional risk assets like equities. Its drivers are typically distinct from traditional markets and, in some cases, even inverted.
Many investors view Bitcoin increasingly as an asset that exists outside traditional fiscal, geopolitical, currency debasement, and inflation cycles. This perspective has attracted many investors in the U.S.
For further insights, read more: Understanding MicroStrategy’s Bold Bitcoin Strategy: Insights from Michael Saylor
