In the past week, Canadian securities regulators approved the offering of the first two Canadian Bitcoin ETFs. By holding Bitcoin, the Canadian funds intend to provide investors with economic exposure to the US dollar and Canadian dollar price of Bitcoin through an ETF structure. For ETF investors, the structures have the potential to eliminate much of the friction associated with holding Bitcoin or investing in the asset directly. The ETF units have been conditionally approved for listing on the Toronto Stock Exchange. Additional details are available in the respective ETF prospectuses, which are publicly available here and here.

Under US securities laws, the Canadian ETFs generally cannot be offered for sale in the United States. The US Securities and Exchange Commission continues to approach the Bitcoin ETF market cautiously, having previously expressed concerns about the immaturity of the Bitcoin market and the potential for manipulation of that market. To date, the SEC has approved no Bitcoin ETFs for sale in the US.

As we recently noted, President Biden’s nominee for SEC chairman, Gary Gensler, comes to the SEC with a deep understanding of financial markets and a strong interest in the digital asset space. While Gensler has said little publicly about his intended agenda at the SEC, perhaps the recent actions in Canada will color his views on the propriety of a Bitcoin ETF product for US investors.