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Bitcoin ETF History in Canada: First Approvals and How It Changed Global Crypto Investing

Bitcoin ETF History in Canada: First Approvals and How It Changed Global Crypto Investing

Michael James 14 November 2025 15 Comments

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Canada's ETF Advantage

Canadian Bitcoin ETFs like BTCC (launched Feb 18, 2021) provide:

Direct ownership of actual Bitcoin (not futures)
Trading on regulated stock exchanges
TFSA/RRSP tax advantages
Security through segregated custody
No private keys or wallet management

Tax Benefit: Canadian investors can hold Bitcoin ETFs in tax-advantaged accounts like TFSAs and RRSPs, avoiding capital gains tax during investment growth.

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On February 18, 2021, something big happened in the world of cryptocurrency. Not in Silicon Valley. Not in New York. But in Toronto. The Bitcoin ETF was born - and Canada made history by launching the world’s first one. This wasn’t a futures contract. Not a trust. Not a tokenized asset. It was a real, regulated, exchange-traded fund that let ordinary Canadians buy Bitcoin just like they bought Apple or Tesla stock. And it changed everything.

How the Purpose Bitcoin ETF Broke the Mold

Before February 2021, if you wanted Bitcoin exposure as an investor, you had to deal with crypto exchanges, private wallets, seed phrases, and the constant fear of getting hacked. Even institutions stayed away because there was no clear, regulated path. That changed when Purpose Investments, a Toronto-based asset manager, got approval from the Ontario Securities Commission (OSC) to launch the Purpose Bitcoin ETF (ticker: BTCC).

What made this different? It held actual Bitcoin - not derivatives, not futures, not promises. Every share of BTCC was backed by real Bitcoin stored in secure cold wallets. Think of it like buying a share in a gold ETF, except instead of gold bars, it’s Bitcoin. This direct ownership structure was the key. It meant the fund’s value moved exactly with Bitcoin’s price, not with speculative futures markets.

And it wasn’t just for wealthy investors. Because it was listed on the Toronto Stock Exchange, anyone with a brokerage account could buy it. Even better - it could be held inside tax-free savings accounts (TFSAs) and registered retirement savings plans (RRSPs). For the first time, Canadians could grow Bitcoin holdings without paying taxes on gains until withdrawal. That alone opened the door for millions of regular people.

The Market Went Wild - And No One Saw It Coming

The launch didn’t just get attention. It exploded. Within 48 hours, over $400 million worth of BTCC shares changed hands. That’s more than any other Canadian ETF had ever seen in its first two days. By the end of the first month, the fund had over $1 billion in assets under management. It was the fastest-growing ETF in history at that point.

TD Securities tracked the numbers and found that Bitcoin ETFs traded nearly $1 billion in volume in their first week. That wasn’t just retail hype. Institutions were buying too. Hedge funds, pension managers, family offices - all of them suddenly had a clean, compliant way to get into Bitcoin without touching a crypto exchange.

By February 2024, three years after launch, BTCC had over $2 billion in assets. That’s more than most crypto trusts in the U.S. at the time. And it kept tracking Bitcoin’s price with near-perfect accuracy - a premium of just 0.2% after three days. That’s because ETFs have a built-in mechanism: authorized participants can create or redeem shares to keep the price in line with the underlying Bitcoin value. No wild swings from supply shortages or panic selling.

Why Canada Got There First - And the U.S. Didn’t

The U.S. Securities and Exchange Commission (SEC) had been sitting on Bitcoin ETF applications for years. They kept saying they couldn’t approve one because the underlying Bitcoin market was too unregulated, too prone to manipulation. Canada didn’t wait. The OSC looked at the same risks - but instead of blocking progress, they worked with Purpose Investments to build safeguards.

The solution? Require direct custody. Force transparency. Mandate third-party audits. Limit exposure to unregulated exchanges. Purpose Investments had to prove their Bitcoin was real, stored securely, and fully accounted for. The OSC didn’t just say yes - they set the standard.

The U.S. didn’t approve its first Bitcoin ETF until October 2021. And even then, it was the ProShares Bitcoin Strategy ETF (BITO) - which didn’t hold Bitcoin at all. It held futures contracts. That meant it was exposed to contango, roll yield, and pricing gaps. Investors weren’t getting Bitcoin. They were getting a bet on Bitcoin’s future price. Canada’s ETF gave them the real thing.

Friends in a cozy office gaze at glowing Bitcoin charts, with digital coins floating like fireflies around them.

The Ripple Effect: How Canada Became the Blueprint

After Purpose’s success, other Canadian firms moved fast. Evolve ETFs launched its Bitcoin ETF the very next day - February 19, 2021. Bitwise, 3iQ, and others followed. Canada went from zero to five spot Bitcoin ETFs in under a year.

But the real impact was global. When the SEC finally approved spot Bitcoin ETFs in the U.S. in January 2024, they copied Canada’s model. The same custody rules. The same transparency. The same structure. The same ticker format. Som Seif, Purpose’s founder, put it simply: "We built the playbook. Now the rest of the world is using it." Countries like Australia, Hong Kong, and Singapore watched closely. Some launched their own versions. Others waited to see how Canada’s ETFs performed under real market stress. The answer? They held up. Even during Bitcoin’s 2022 crash, BTCC tracked the price accurately. No liquidity crunch. No tracking error. Just clean, simple exposure.

What This Meant for Everyday Investors

For regular people, this wasn’t just about buying Bitcoin. It was about trust. Before BTCC, crypto felt like a wild west. You had to learn how to use a wallet. You had to worry about phishing scams. You had to decide which exchange to use - and hope they didn’t get hacked.

With BTCC, you opened your brokerage app - Questrade, Wealthsimple, TD Direct Investing - and typed in "BTCC." You clicked buy. Done. No passwords. No keys. No risk of losing your seed phrase. You could even set up automatic purchases, just like you would for a mutual fund.

It also gave people peace of mind. If something went wrong, you weren’t stuck with a crypto exchange that might disappear. You were protected under Canadian securities law. If Purpose Investments failed (which it didn’t), your shares were still backed by Bitcoin held in segregated custody. The fund’s assets were separate from the company’s balance sheet. That’s the kind of protection you get with traditional ETFs - and now, with Bitcoin too.

A Canadian figure holds a glowing Bitcoin ETF scroll, illuminating global pathways as celestial crypto constellations swirl above.

Legacy and Lessons

Five years after its launch, the Purpose Bitcoin ETF is still one of the largest spot Bitcoin ETFs in the world. It’s not just a product. It’s proof that regulation and innovation can work together. Canada didn’t ban crypto. It didn’t ignore it. It built a system that made it safe, simple, and scalable.

The lesson? Sometimes the best way to solve a problem isn’t to wait for someone else to fix it. It’s to build the solution yourself - and do it right.

Frequently Asked Questions

What was the first Bitcoin ETF in Canada?

The first Bitcoin ETF in Canada was the Purpose Bitcoin ETF (BTCC), launched on February 18, 2021, by Purpose Investments. It was also the world’s first physically-backed Bitcoin ETF available to retail investors.

How does the Purpose Bitcoin ETF work?

The Purpose Bitcoin ETF holds actual Bitcoin in secure cold storage. When you buy a share of BTCC, you’re buying a fraction of the Bitcoin the fund owns. The fund’s value moves directly with Bitcoin’s price. It’s traded on the Toronto Stock Exchange like any other stock, and you can hold it in TFSA or RRSP accounts.

Is the Purpose Bitcoin ETF better than buying Bitcoin directly?

It depends on your needs. If you want full control and lower fees, buying Bitcoin directly through a crypto exchange might be better. But if you want simplicity, security, tax advantages, and to avoid managing private keys, the ETF is far easier and safer for most people - especially those using registered accounts like RRSPs or TFSAs.

Why did the U.S. delay Bitcoin ETF approval?

The U.S. Securities and Exchange Commission (SEC) was concerned about market manipulation and the lack of regulation in Bitcoin spot markets. Canada solved this by requiring direct custody and strict reporting. The U.S. eventually followed Canada’s model when it approved spot Bitcoin ETFs in January 2024.

Can I buy the Purpose Bitcoin ETF outside of Canada?

Yes, but with limitations. Non-Canadian investors can buy BTCC through international brokers that access the Toronto Stock Exchange. However, tax treatment and currency conversion fees may apply. It’s not as straightforward as buying it from within Canada.

What happened to other Canadian Bitcoin ETFs after BTCC?

After Purpose launched BTCC, Evolve ETFs released its Bitcoin ETF the next day. Others followed, including 3iQ’s QBTC and Bitwise’s BITC. All adopted the same physical custody model. While BTCC remains the largest, the competition helped solidify Canada’s position as a leader in regulated crypto investment.