Bitcoin, Ether ETF That Aims to Cushion Volatility Set to Launch in Canada
Product seeks to offer upside of both bitcoin and ether, while aiming to reduce volatility
Blockworks exclusive art by Axel Rangel
key takeaways
- Galaxy Digital is angling to beef up its actively managed products
- The firm partnered with Inveso in September in a bid to create a suite of physically backed digital asset ETFs
A new ETF designed to offer risk-controlled exposure to bitcoin and ether is set to begin trading Tuesday in Canada.
The CI Galaxy Multi-Crypto ETF (CMCX) is available on the Toronto Stock Exchange. Galaxy Digital Asset Management (GDAM), an arm of crypto and blockchain firm Galaxy Digital, manages the ETF’s portfolio.
Galaxy partnered with CI Global Asset Management (CIGAM), which acts as the fund sponsor. CIGAM had more than 100 ETFs with $15 billion in combined assets as of Aug. 31 — good for the fifth-largest ETF provider in Canada.
CMCX gains exposure to BTC and ETH by investing in the CI Galaxy Bitcoin ETF (BTCX) and the CI Galaxy Ethereum ETF (ETHX), which are also listed in Toronto. It seeks to reduce the volatility of investing in the top two cryptocurrencies by systematically rebalancing the allocations between crypto and cash.
Steve Kurz, Galaxy’s global head of asset management, said the fund is the first digital asset model-driven ETF product designed to reduce exposure to volatility, while still capturing market upside. It carries an expense ratio of 50 basis points.
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“Two of the biggest feedback points we’ve heard from investors who have not yet come into crypto are the need for diversification beyond one coin, and the need to reduce volatility,” Kurz told Blockworks. “This product seeks to accomplish both.”
GDAM had $3.2 billion in assets under management as of November, the most recent data available.
Kurz said GDAM plans to continue its partnership with CI Global Asset Management by potentially launching other thematic and single-asset products.
“We continue to keep a close eye on the digital asset ETF landscape here in the US,” he added. “As we expand our passive business, we’re also deepening our focus on the actively-managed side.”
This includes the build-out of the firm’s fund-of-funds suite with Vision Hill Group following its May acquisition, Kurz said.
More recently, Galaxy launched a Solana fund in December for clients willing to invest at least $250,000.
As for other ETFs, Galaxy had filed for a US ETF that would invest directly in bitcoin. In an amendment to that application filed with the SEC, Invesco was listed as a sponsor.
The two companies announced that month that they would partner to create a suite of physically backed digital assets ETFs, though the Securities and Exchange Commission (SEC) has not yet approved such products.
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