Evolve Funds Seeks to Launch Leveraged Crypto ETFs in Canada

Canada’s exchange-traded fund (ETF) market may soon feature leveraged Bitcoin and Ethereum products, as Evolve Funds files a preliminary prospectus to launch the country’s first leveraged crypto ETFs.

Canada’s Crypto ETF Scene

For some time, Canada’s crypto ETF scene has been losing investors to the United States, due to lower fees, higher trading volumes, and the launch of spot Bitcoin ETFs in the U.S. However, Evolve Funds is making a move to bring investors back with a new strategy – leverage.

The Toronto-based firm plans to launch the Evolve Levered Bitcoin ETF and Evolve Levered Ether ETF, offering 1.25x exposure to Bitcoin and Ethereum. While this is lower than the 2x leverage offered by some U.S. funds, Evolve’s approach differs as it plans to use cash borrowing instead of derivatives. The funds will also rebalance monthly, rather than daily.

Challenges Facing Crypto ETFs in Canada

Crypto ETFs in Canada have faced a tough start to 2024, with five consecutive months of outflows. According to National Bank Financial, investors pulled over C$1.1 billion from these funds, with much of that money moving to the United States, where spot Bitcoin ETFs launched in January 2024.

Crypto Regulation in Canada

Earlier this year, the Canadian government raised concerns about the growing use of cryptocurrencies in the illicit opioid trade, particularly in the trafficking and production of fentanyl and other synthetic drugs. The Financial Transactions and Reports Analysis Centre of Canada noted that digital assets, including stablecoins, are being used to facilitate international drug trade while bypassing traditional financial systems.

Crypto investors should be aware of the risks involved in trading leveraged ETFs and the potential impact of regulatory changes on the market.

For those interested in learning more about the world of cryptocurrencies and investing, Global Crypto News offers a wealth of information and insights. Stay up-to-date with the latest news and trends in the crypto space.

Some key tips for crypto investors include:

• Conduct thorough research before investing in any crypto asset or product.
• Understand the risks involved in trading leveraged ETFs and the potential impact of regulatory changes on the market.
• Stay informed about market trends and news to make informed investment decisions.
• Diversify your investment portfolio to minimize risk.

Stay tuned for more news and updates from the world of cryptocurrencies and investing.

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