Canada Marks Launch Of First Bitcoin, Ethereum ETFs With Monthly Payouts
December 01 2021 - 12:00PM
NEWSBTC
ETFs have been trading in the United States, Canada, and some other
countries for a while now. These ETFs have made strides so far with
high volumes traded in throughout their existence in the market.
However, none of these ETFs have offered mostly dividends to their
investors. An asset management firm in Canada has now made history
as the first to offer a monthly yield to those invested in its ETF.
Edging Towards The Future Purpose Investment has first made
headlines in February when it created the first North American ETF
that tracks the price of Bitcoin. This time around, the investment
firm has made another stride in becoming the first to launch an ETF
that pays monthly yields to investment. This puts Canada at the
front of the race when it comes to crypto ETFs and the purposes
which they serve. Related Reading | Market Analysts Explain
Why This Correction Is Good For Bitcoin The Bitcoin and Ethereum
ETF will offer investors monthly yields using a derivatives-based
covered call strategy. Like the ETFs, the strategy is another first
of its kind in the crypto market. The annual yield of the ETFs is
also attractive according to estimates. Market experts explained
that although there is no way to guarantee what the amount would be
each month, it is expected to be the equivalent of 8% to 10% annual
yield, with 1.10% going to the firm as a management fee. BTC
trending south of $57K | Source: BTCUSD on TradingView.com Canada
is ahead of the U.S. in the ETFs market and currently has approved
Ethereum ETFs whereas the latter is still yet to approve its first
Ethereum ETF. Both Bitcoin and Ethereum ETFs offered by Purpose
Investment will pay out similar yields and are classified as income
in non-registered accounts. ETFs Making Waves ETFs have offered
investors a way to get exposure to the cryptocurrency market
without having to purchase any of the digital assets themselves.
The anticipation for their approval shone through with the
first-ever Bitcoin ETF approved in the United States, the ProShares
Bitcoin Futures ETF, which saw over $1 billion in trading volume
after the first day. Related Reading | Over 1 Milllion ETH Has
Been Burned Since Ethereum EIP-1559 ETFs, however, do not shield
investors from the highly volatile nature of the market. For the
Purpose Investment ETFs, investors are shielded to a certain extent
by these fluctuations. They will enjoy the benefits of monthly
yields, but will also see limited capital gains compared to those
who do not for this reason. “Given the connection between the
volatility of the underlying asset and premiums, covered call
strategies on cryptocurrencies offer unique exposure to a unique
asset class, providing investors a high yield without sacrificing
significant price participation.” – Vlad Taveski, COO & Head Of
Product, Purpose Investments Tasevki told “Yahoo Finance Canada”
that investors are allowed to choose if they wish to earn these
monthly yields on their investors. It is a way to generate
short-term income using covered calls on assets which they believe
in. Featured image from Investment U, chart from TradingView.com
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