Canada Crypto Funds: Exploring cryptocurrency investment in the great white north

1. The Rise of Canada crypto funds

Canada’s journey with crypto funds began with a game-changing event: the launch of the Purpose Bitcoin ETF (BTCC) on February 18, 2021, by Purpose Investments. Traded on the Toronto Stock Exchange (TSX), it was the first physically settled Bitcoin ETF globally, allowing Canadian investors to gain exposure to Bitcoin without the need to manage digital wallets or private keys. This move set the stage for further innovation, with additional ETFs launched for Ethereum and other crypto assets.

The appeal of these funds lies in their accessibility. Unlike direct crypto ownership, which requires navigating exchanges, securing assets, and managing wallets, crypto funds allow investors to purchase and manage digital assets seamlessly through traditional brokerage accounts. Furthermore, these funds can be held within tax-sheltered accounts like Registered Retirement Savings Plans (RRSPs) or Tax-Free Savings Accounts (TFSAs), providing additional benefits to Canadian investors.

By 2025, Canada is home to more than a dozen crypto ETFs, along with actively managed funds such as the Rivemont Crypto Fund, which was launched in 2017 as the country’s first actively managed cryptocurrency fund.

2. Key Players in Canada’s Crypto Fund Ecosystem

Several notable players have emerged in the Canadian crypto fund ecosystem, each offering unique products to investors:

Purpose Investments: The Purpose Bitcoin ETF (BTCC) and Purpose Ether ETF (ETHH) remain flagship products in Canada’s crypto fund space. These funds track the spot prices of Bitcoin and Ethereum, providing easy access for both retail and institutional investors. Purpose Investments is known for holding assets in cold storage to ensure the safety of the funds, and its management fees are competitive, typically around 1% or lower.
CI Global Asset Management: CI offers Galaxy Bitcoin ETF (BTCX) and Galaxy Ethereum ETF (ETHX), both of which are among the lowest-cost options in Canada, with management fees as low as 0.40%. CI has expanded its offerings to include mutual fund versions, making these investment vehicles accessible to a broader audience with lower minimum investments, starting at $500.
Fidelity Canada: Known for its institutional-grade cold storage solutions, Fidelity offers the Fidelity Advantage Bitcoin ETF (FBTC) and Fidelity Advantage Ether ETF. Both ETFs were launched in 2021 and 2022, respectively. As of January 2025, Fidelity reduced its management fees to 0.40%, targeting investors who prioritize security and diversification.
Rivemont Crypto Fund: The Rivemont Crypto Fund, based in Gatineau, Quebec, is Canada’s only actively managed crypto fund. Rivemont’s approach includes diversifying investments across multiple cryptocurrencies, such as Bitcoin, Ethereum, and Litecoin, using a fundamental and trend-following strategy. While smaller in scale, the fund appeals to investors who are comfortable with higher risk and are seeking potentially outsized returns.
3iQ Corp: 3iQ manages one of Canada’s largest digital asset funds, The Bitcoin Fund (QBTC). By 2021, the fund had over CAD 2.5 billion in assets under management. 3iQ also made history by listing its Bitcoin fund on Nasdaq Dubai, which marked a significant global milestone for Canadian crypto funds.

3. Regulatory Landscape

Canada has adopted a progressive stance on crypto funds, but this is coupled with a strict regulatory framework overseen by the Canadian Securities Administrators (CSA) and provincial regulators such as the Ontario Securities Commission (OSC). Crypto funds are subject to securities laws to ensure investor protection, but the regulatory environment has its challenges.

In February 2025, the Canadian government took a cautious step by banning crypto funds from reduced margin eligibility, citing concerns about the volatility and liquidity risks associated with cryptocurrencies. This move increased the capital requirements for leveraged trading, making it more expensive for both funds and investors to amplify their positions.

Additionally, the CSA issued warnings about unregistered platforms such as "Canada Crypto Fund," which was flagged by New Brunswick’s Financial and Consumer Services Commission as a potential scam in March 2025. This highlights the ongoing risks posed by fraudulent entities that seek to exploit the growing interest in crypto investments.

Despite these hurdles, the regulatory environment continues to encourage innovation. For instance, in early 2025, the SEC acknowledged Fidelity’s Solana ETF application, which could pave the way for altcoin-based ETFs in Canada, expanding beyond Bitcoin and Ethereum into other promising blockchain assets.

4. Recent Developments

As of April 7, 2025, the landscape for Canadian crypto funds reflects both opportunity and caution:

Market Volatility: The crypto market has seen significant volatility, with the Fear & Greed Index indicating "Extreme Fear" at a value of 21. The prices of major cryptocurrencies like Bitcoin and Ethereum have corrected from the highs of late 2024. However, despite this, institutional deposits into Solana-based funds have surged by 14% month-over-month, signaling resilience within the crypto fund sector.
Institutional Adoption: Partnerships with mainstream financial institutions like PayPal (which integrated Solana for stablecoin payments) and Franklin Templeton (which extended its U.S. Government Money Fund to Solana) underscore growing institutional interest in crypto assets.
Hackathon Momentum: The Solana Breakout Hackathon, set to take place in May 2025, highlights Canada’s continued role in fostering blockchain development. This event could indirectly boost interest in Canadian crypto funds, as developers create new blockchain solutions that may attract investment.

5. Benefits and Risks of Canada Crypto Funds

Benefits:

Accessibility: Crypto funds provide an easy, convenient way for both novice and seasoned investors to gain exposure to cryptocurrencies without the complexities of direct ownership, such as managing wallets or securing assets.
Diversification: Funds like Rivemont’s provide exposure to multiple cryptocurrencies, reducing the risk associated with single-asset investments.
Tax Advantages: Holding crypto funds within tax-sheltered accounts like RRSPs or TFSAs allows investors to avoid capital gains taxes, a benefit not available with direct crypto purchases.

Risks:

Volatility: Like the underlying cryptocurrencies, crypto funds are prone to market swings, which can result in significant gains or losses.
Regulatory Uncertainty: Ongoing regulatory changes, such as bans on margin eligibility and crackdowns on unregistered funds, add an element of unpredictability to the sector.
Scams: The rise of fraudulent entities posing as legitimate crypto funds, like the "Canada Crypto Fund" scam, underscores the importance of thorough due diligence.

Conclusion

Canada’s crypto funds, from Purpose Investments' pioneering Bitcoin ETF to Rivemont's active management approach, represent the country’s forward-thinking stance on digital assets. As of April 7, 2025, these funds offer a regulated, accessible way for Canadian investors to tap into the crypto market, despite the challenges posed by volatility and regulatory hurdles. Whether you are considering a Bitcoin ETF or exploring altcoin funds, Canada’s crypto fund ecosystem is an exciting frontier to watch—one that offers both opportunity and risk in equal measure.

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