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What Is a Bitcoin ETF? – Yahoo Finance

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A bitcoin exchange traded fund (ETF) lets traders gain exposure to BTC via traditional stock markets, without needing to directly buy or sell the digital asset on a cryptocurrency exchange. 

A Bitcoin ETF is an exchange-traded fund that specifically tracks the price of the leading cryptocurrency and allows traders to purchase or sell the security on a stock exchange throughout the day. They can be cash-settled or physically-settled, meaning investors will receive either fiat currency or actual bitcoin upon exiting, respectively.

ETFs are regulated traditional financial products and can be bought through a number of retail-friendly mobile trading apps, including Robinhood, Trading212, TD Ameritrade and Fidelity. The most popular ones track major stock indexes, such as the Standard & Poor’s 500 Index, or other traditional assets and commodities like oil and gold.

Related: Even Skeptics May Need to Consider Crypto Exposure: WSJ’s Heard on the Street

Bitcoin ETFs have been a hot topic in the crypto space for many years, ever since the Winklevoss twins’ “COIN” Bitcoin ETF filed with the United States Securities and Exchange Commission (SEC) in 2013 was rejected. It was widely believed that a Bitcoin ETF would usher in a new wave of institutional investment into the crypto industry, bringing much-needed maturity and stability to the market. Seven years on, however, the SEC still has yet to approve a Bitcoin ETF despite dozens of proposals from multiple companies including a second Winklevoss Twin ETF in 2018, one from Bitwise, five from Direxion, two from GraniteShares and many more.

The main arguments given by the SEC for these repeat rejections have been that the Bitcoin market is too volatile, lacks sufficient surveillance and is too easily manipulated.

Things may be about to change, however, as Canada’s financial regulator, the Ontario Securities Commission (OSC), recently approved the world’s first two Bitcoin ETFs in quick succession. The Purpose Bitcoin ETF (BTCC) and the Evolve Bitcoin ETF (EBIT) are both physically settled ETFs and have applied to be listed on the Toronto Stock Exchange.

With the arrival of a Bitcoin ETF in North America, many are optimistic that the SEC will follow suit soon in the United States; especially now that Gary Gensler, former commissioner of the Commodity and Futures Commission (CFTC) and MIT blockchain tutor, is expected to replace ex-SEC Chairman, Jay Clayton.

Related: A Sudden Loss of Faith in Tether Would Pose Risk to Bitcoin, JPMorgan Says

“My guess is we get an ETF this year,” says Mike Novogratz, CEO of Galaxy Digital and former colleague of Gensler at Goldman Sachs in the late 1990s.

“Gary taught a class on blockchain at M.I.T. and on crypto. He understands it cold. He’s progressive, right? And progressives broadly are going to go after … the rent takers. Crypto is not a rent taker… Crypto is trying to disrupt the rent takers.”
Bloomberg Senior ETF analyst, Eric Balchunas, tweeted his support for the new Bitcoin ETFs, adding, “US usually follows shortly after. Good sign for US bitcoin ETF.”

Sui Chung, CEO of CF Benchmarks, also anticipates pressure will now be on the U.S. SEC to follow suit. “Now that the OSC has said that if a product is well constructed enough the crypto market is sufficiently mature for these types of financial products, the industry’s attention inevitably turns south of the border to the U.S.”

Bitcoin ETF FAQs

Who can invest in ETFs and how do you trade them?

You don’t need to be an accredited investor to purchase ETFs; anyone can invest in them.

All you need in order to begin investing in ETFs is to set up an online brokerage account or download one of the many mobile trading apps. From there, you’ll be able to buy and sell a wide range of ETFs that track a number of different markets. A list of leading mobile trading services can be found here.

What are the pros and cons of trading ETFs?

While it might seem counterintuitive to invest in a Bitcoin ETF rather than buy actual bitcoin, there are a number of advantages to doing it this way, namely:

  • No need to go through the process of having to store crypto safely yourself.

  • Buying an ETF through an online broker is significantly more secure, faster and less prone to outages than purchasing digital assets directly from a crypto exchange.

  • There are much clearer tax implications and guidance for traditional financial products than digital assets.

  • Stock exchanges are more liquid than crypto exchanges so it’s much easier to buy and sell ETFs.

There are, however, a number of disadvantages to investing in a Bitcoin ETF as opposed to buying the asset directly.

  • ETFs can only be bought and sold during market trading times, whereas crypto markets run 24/7. This means that if the price of bitcoin moves sharply, you could potentially have to wait hours before you have the chance to offload to buy up more.

  • It’s free to hold your own bitcoin but ETFs charge management fees.

  • Buying ETFs requires you to complete know-your-customer checks (KYC) but bitcoin can be bought anonymously peer-to-peer.

  • ETFs require you to trust third-party custodians.

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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

The Canadian Press. All rights reserved.

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.

“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.

“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”

Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.

On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.

If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.

These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.

If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.

However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.

He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.

“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.

Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.

The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.

Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.

Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.

Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.

Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.

Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”

In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.

“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:SHOP)

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.

The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.

The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.

RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.

The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.

RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:REI.UN)

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