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Financials

Canadian asset managers race to win bitcoin ETF gold rush

Feb 25 (Reuters) - Asset managers in Canada have been rushing to launch physically settled Bitcoin exchange traded funds (ETF), aiming to capitalise on a new market opportunity, after the country became the first to approve such ETFs this month.

Canada has seen a spate of regulatory applications for Bitcoin ETF issuance, sparked by the launch of the Purpose Bitcoin ETF, the world’s first ETF physically settled in the cryptocurrency.

The Purpose ETF had a total asset value of about C$561.3 million ($449.8 million), as of Feb. 24, its manager told Reuters, and held about 9,647 bitcoins.

Purpose’s offering has stolen a march on the Evolve Bitcoin ETF, which was first traded just a day later. Evolve’s fund managed C$38.2 million, as of Wednesday.

Evolve on Wednesday axed here the ETFs management fee by a quarter to 0.75%, saying this made the offering the cheapest "bitcoin ETF currently available in the market."

The ETFs provide advantage over the closed-ended funds that financial markets investors have usually employed as a way to gain Bitcoin exposure, including that the ETFs’ traded prices are unlikely to diverge by a considerable margin from the underlying portfolio values.

This gives them a strong edge over U.S.-listed investment vehicle Grayscale Bitcoin Trust and closed-end investment fund CI Galaxy Bitcoin Fund.

The front-runners in the Canadian bitcoin ETF race have been moving ahead with new offerings; exchange operator TMX Group on Tuesday began listing here options on Purpose's ETF on the Montréal Exchange.

CI Financial last week filed for a preliminary prospectus for a Bitcoin ETF, working with diversified asset firm Galaxy Digital, commercial intelligence provider MarketLine reported here. ($1 = 1.2483 Canadian dollars)

Reporting by Aaron Saldanha and Patturaja Murugaboopathy, Editing by Vidya Ranganathan and Shinjini Ganguli

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