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- Company 3iQ launches first Ethereum ETF (ETH) listed on a Canadian exchange after raising $75 million in an IPO.
- Grayscale announced the purchase of $266 million in Bitcoin and $58 million in Ethereum.
The first Ethereum Exchange Traded Fund (ETF) has gone live on the Toronto Stock Exchange. Announced by Canadian fund management company 3iQ, the Ethereum ETF raised $75 million in its initial public offering. The fund offered 7,240,000 Class A units that have begun trading under the symbol QETH.U.
3iQ is one of Canada’s largest fund management firms with about $400 million in assets under management (AUM). The company is recognized for having launched a public fund of investment in Bitcoin (QBTC, QBTC.U) and a private fund of investment. The latter offers Bitcoin, Ether, and Litecoin to its clients.
The Ethereum ETF aims to give Ether exposure to its clients for profit or to trade in the cryptocurrency over the long term. 3iQ will manage the investment and portfolio of the “Ether Fund”. The company has partnered with Gemini, founded by the Winklevoss twins, to gain access to their custody service.
Other important partners in the launch of the fund have been MV Index Solutions (MVIS) and VanEck’s U.S.. 3iQ announced that they will obtain institutional-grade ETH pricing through these partners.
Huge news for Ethereans. The Ether Fund by @3iq_corp will list on the Toronto Stock Exchange ($QETH) tomorrow morning. The fund has already raised ~$75MM. All $ETH will be held by @Gemini Custody. To the moon! 🚀
— Tyler Winklevoss (@tyler) December 10, 2020
Institutional race to buy Bitcoin and Ethereum
The launch of an Ethereum ETF on a major exchange was only a matter of time. In 2020, institutions have increased their exposure to major cryptocurrencies and have “pump” their prices. At the same time that 3iQ announced its product, Grayscale invested over $300 million to add 14,491 BTC and 105,000 ETH to its trusts. At the time of publication, the firm reports a record $12.2 billion in assets under management (AUM).
In addition to Grayscale, MicroStrategy will issue senior convertible notes. Initially, the company announced a $400 million offering, but institutional demand allowed them to increase it to $550 million with an additional $100 million call option. The company’s stock has seen an increase since they changed their treasury strategy around Bitcoin.
As the researcher, Ryan Todd’s revealed most of the investors who have been interested in MicroStrategy stock since that event has been hedge funds. In that sense, Todd concludes:
(…) the bulk of net inflows into MicroStrategy as a backdoor quasi bitcoin ETF is coming from hedge funds. Will be interesting to see who ends up filling MicroStrategy’s convertible offering, but prob going to be a fund.
The above events seem to indicate that a Bitcoin ETF could have a higher probability of being approved in the US during 2021. The regulator could receive more pressure from institutions. If approved, investors could feel “safer” and could search to gain exposure to the cryptocurrency. This might drive prices to new all-time highs.
