The seemingly unstoppable rise of bitcoin continued Tuesday with the cost of a single unit of the digital currency rising above $50,000 US for the first time.
The same bitcoin just one year ago would have cost you $10,000 US. The price is up almost 200 per cent in the last three months alone.
Bitcoin is rallying as more companies signal the volatile digital currency could eventually gain widespread acceptance as a means of payment. The vast majority of those who have acquired bitcoin have treated it as a commodity, like gold, with few places accepting it in exchange for goods or services.
Companies have been leery because of bitcoin’s volatility and its use by parties who want to avoid the traditional banking system for a myriad of reasons.
Last Monday, however, the electric car company Tesla sent a tremor through the digital currency markets, saying that it was buying $1.5 billion US in bitcoin as part of a new investment strategy, and that it would soon be accepting bitcoin in exchange for its cars.
Then Blue Ridge Bank of Charlottesville, Va., said that it would become the first commercial bank to provide access to bitcoin at its branches. The regional bank said Wednesday that cardholders can purchase and redeem bitcoin at 19 of its ATMs. BNY Mellon, the oldest bank in the U.S., followed a day later, saying it would include digital currencies in the services it provides to clients.
‘Not going to happen overnight’
While most expect a slow evolution toward widespread usage of bitcoins as currency, Richard Lyons, a finance professor at the University of California at Berkeley, says it’s inevitable. Lyons predicts bitcoin and other digital currencies “will become transactional currencies increasingly over the next five years. It’s not going to happen overnight,” he said.
Lee Reiners, who teaches fintech and cryptocurrency courses at Duke University School of Law, said BNY Mellon’s move makes sense because “there are now numerous high-net-worth individuals and investment funds embracing crypto as an asset class to be added to their portfolio.”
But Reiners believes companies will remain hesitant to accept bitcoin for payment because of its volatility.
“If you were a merchant, why would you accept payment in an asset that could be worth 20 per cent less a day after you receive it?” Reiners said in an email.
Investors will have to grapple with that volatility as well. The price of bitcoin has soared and dipped since its debut on the futures market in 2017. Those fluctuations, analysts warn, could wreak havoc on a company’s bottom line and deter investors.
Tesla warns of volatility
Assuming Tesla bought bitcoin at the volume weighted average price of $34,445 US in January, the company is sitting on a gain of about 38 per cent with its investment. But in the regulatory announcement unveiling the investment, Tesla warned about the volatility of bitcoin, its reliance on technology for use and lack of a centralized issuer, such as a government.
“While we intend to take all reasonable measures to secure any digital assets, if such threats are realized or the measures or controls we create or implement to secure our digital assets fail, it could result in a partial or total misappropriation or loss of our digital assets, and our financial condition and operating results may be harmed,” Tesla said in the filing.
“Tesla is going to have to be very careful and comprehensive in accounting for its bitcoin investment on its books,” said Anthony Michael Sabino, a professor of law, at St. John’s University. “Like any other financial asset other than actual cash, it might fluctuate.”
Canadian ETF market
Bitcoin-based exchange traded funds are getting the go-ahead from Canadian regulators, creating a path for a fund structure that investment managers say is unique in the industry.
Toronto-based Purpose Investments says its bitcoin ETF will likely start trading this week under the symbol “BTCC,” after the fund worked with regulators to make sure it could create something that follows the rules for both the ETF market and the digital asset industry.
An Ontario Securities Commission spokesperson says the regulator finished reviewing Purpose Investments’ final plan to offer securities last Thursday and gave the fund a receipt that makes it a reporting issuer in Ontario.
After Purpose Investments announced the milestone, another Canadian fund, 3iQ, said it also received preliminary receipts for a bitcoin ETF in all of the Canadian provinces and territories except for Quebec.
Both funds claim to be “physical” bitcoin ETFs, setting them apart from some of the other cryptocurrency investments out there, such as the bitcoin futures that trade on the Chicago Mercantile Exchange.
‘Physical,’ not derivative
Purpose Investments Chief Investment Officer Greg Taylor says the fund is different from a derivative or futures contract, as Purpose Investments will buy bitcoin every time someone puts money into the ETF.
Taylor says Purpose Investments will also store the bitcoin codes themselves — not on the internet — using a process called “cold storage.” OSC has described cold storage as “a computer with no access to a network” that is less vulnerable to hacking.
Purpose Investments says the end result of these bitcoin ETFs is that investors will hold actual bitcoin in their portfolios but can buy and sell it similarly to buying or selling a stock.
“The risk is for traditional investors that you have to open up a trading account to buy bitcoin and you’re in self-custody — meaning you’re going to get the code and password for that coin. And you’re responsible for doing that,” said Taylor. “With the ETF structure, it’s going to be easier as we’ll do that with our custodian.”
CIBC Mellon is working as a fund administrator for Purpose Investments’ bitcoin ETF, as the firm looks for ways to meet rising demand for cryptocurrencies.
Ronald Landry, who runs Canadian ETF services for CIBC Mellon, says it is working on getting more cryptocurrency services up and running in Canada.
3iQ chief executive Fred Pye says a physical bitcoin ETF is the natural progression from its other investment vehicles, which include a publicly listed bitcoin investment fund and a fund based on the cryptocurrency Ether.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
