What do the Spot Bitcoin ETFs in Canada say about its big brothers in America?

On January 10, the US Securities and Exchange Commission (SEC) ended the years-long wait for the Spot Bitcoin ETFs. The approval of the Bitcoin ETFs in America marked an important step in the maturing process for bitcoin. It opened the doors for millions of Americans to invest in the emerging digital currency and they appear to be doing so in large numbers at the moment.

Canada versus America

In Canada, investors have had access to Spot Bitcoin ETFs for some time. Since then, Canada’s market share for Spot Bitcoin ETFs has grown to 46 percent according to CoinGecko. In total, Canada’s six Spot Bitcoin ETFs hold $2.79 billion worth of bitcoin for its clients.

After the launch of the Spot Bitcoin ETFs in the United States, the little brother in Canada lost some assets. This may have to do with the lower management fee that the American Spot Bitcoin ETFs charge.

As a result, investors pay a lower percentage on their investment every year, which of course makes it attractive to move their bitcoin.

According to Frederick Pye of 3iQ, we should not judge ETFs solely on the basis of the management fee. He claims that “experience, trade and execution” have a much greater impact. “When we look at the total returns of the Spot Bitcoin ETFs in America over the first month, there appears to be no correlation with management costs,” Pye said.

BlackRock not the cheapest

It is true that BlackRock is not the cheapest, but they are not far from that. BlackRock can charge a small premium because of its reputation and still become the largest.

This has to do with the strong reputation they have built up over the years within the financial industry.

Now it will be especially interesting to see whether the Spot Bitcoin ETFs can manage to generate these inflows all year round. If that works, a new all-time high for bitcoin seems almost inevitable in 2024.

At the time of writing, the bitcoin price is clocking in at ~$56,000 and we are rapidly heading towards the high of $69,000 that was set in November 2021.