Last week, 3iQ Corp. successfully commenced trading of The Bitcoin Fund (TSX:QBTC.U). The Fund was the product of an initial public offering (IPO) of units and a merger with 3iQ Bitcoin Trust.
According to a company release, the Fund’s investment objectives are to provide holders of units of the Fund with:
- exposure to the digital currency bitcoin and the daily price movements of the U.S. dollar price of Bitcoin, and
- the opportunity for long-term capital appreciation.
The listing on the exchange was the end result of an extensive process of review of the Bitcoin fund that resulted in a decision by the Ontario Securities Commission (OSC) in the fall of 2019. The conclusion of the review by the OSC stated:
[OSC] Staff had not demonstrated that:
- Bitcoin is an illiquid asset such that the Fund will not be compliant with the restrictions on illiquid assets in NI 81-102, or
- It is not in the public interest to issue a receipt for the Fund’s prospectus, because of Staff’s concerns regarding the integrity of the Bitcoin markets, and the Fund’s ability to value and safeguard the Bitcoin it holds and file audited financial statements.
The decision stands in contrast to the US Securities and Exchange Commission’s decision not to approve the listing of a Bitcoin-based exchange-traded product (ETP). At least part of the SEC’s concern was due to allegations of price manipulation of the world’s most popular digital currency. The listing on a regulated Canadian securities exchange may provide an indirect path for US investors interested in purchasing shares in a Bitcoin-based ETP.
Founded in 2012, 3iQ is a Canadian investment fund manager focused on providing investors with exposure to digital assets.
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