Coinsquare’s portfolio management division, last week, listed two ETFs on the Toronto Stock Exchange (TSX). Coin Capital Investment Management Inc. (Coincapital) is giving retail investors the opportunity to gain exposure to cutting edge technologies on a diversified basis. Coincapital listed the STOXX Blockchain Patents Innovation Index Fund (LDGR), and STOXX B.R.AI.N. Index Fund (THNK) last week in Canada.
These two ETFs don’t give investors direct exposure to cryptos, but they will allow them to invest in some of the biggest companies that are developing blockchain technology. LDGR and THNK are the first ETFs that Coincapital has listed. They have already started trading, and may not be the last blockchain ETFs that find a home on Canadian exchanges.
Lewis Bateman, the CEO of Coincapital, had this to say about the new investment products:
“Canadians know technologies like artificial intelligence and the blockchain are going to change the way we live and work, but it can be difficult to access high quality investments in these sectors without deep domain expertise,” and continued via a statement prepared for the occasion, “We’re doing the work for investors, using our in-depth industry knowledge to provide Canadians with an innovative suite of investment options that help them invest in new technology even if they’re not an expert.”
Coinsquare Enters a Growing Sector
Some brave investors bought into crypto mining firms last year. They were listed on the TSX-V, not the TSX. Companies like HIVE Mining saw their share prices explode as crypto prices ran up during the last half of 2017, but as cryptos have fallen all year, crypto mining shares have been under serious pressure.
Unlike Hive, or Hut-8, these new ETFs will invest in larger companies that don’t rely on crypto prices to remain profitable. Of the two new ETFs from Coincapital, LDGR invests in stocks of companies that are either developing, or investing in blockchain technologies. This approach should help to cut risks, and make sure that investors gain access to a wide range of potentially good ideas.
Interestingly, Coincapital uses an in-house artificial intelligence (AI) algo to help them select companies for LDGR. According to the company, they look at blockchain patents, and also iSTOXX Yewno Developed Markets Blockchain Index for potential investments. Coincapital joins Horizons ETFs Management Canada in offering blockchain-focued ETFs for retail investors.
Canada May Pull Ahead of the USA
To date, there have been no ETFs approved that give retail investors direct ownership in cryptos in North America. There have been numerous attempts to create Bitcoin ETFs in both the US and Canada. It is impossible to say which nation will be successful in getting a crypto ETF to the general investment public first.
If the last two years are any guide, Canada could be the winner in creating an open market for crypto and blockchain-based investments on public exchanges. Not only did experienced investors like US Global’s Frank Holmes choose the TSX-V to take HIVE Mining public, Wall St. veteran Mike Novogratz also chose Canada’s public equity markets for his digital currency merchant bank.
The Goldman Sachs of Crypto
Galaxy Digital Holdings is an innovative idea. Mike Novogratz has been an outspoken supporter of cryptos. His interest evolved into a reverse-merger with a defunct pharma company that was listed on the TSX-V, which saw Galaxy Digital begin trading publicly on August 1st of this year.
Like most things in the world of crypto, Galaxy Digital’s assets have been under pressure this year. It is more important that he was able to find a capital market that was willing to let investors buy into a firm that could be a force to be reckoned with over the next decade.
Despite all the negative news this year about crypto prices, Mike Novogratz is still optimistic about the long-term viability of digital currencies. He told an audience at Yahoo’s “All Markets Summit” last week that, “I think institutions are moving towards investing. It’s shocking how much has happened,” and that he thinks that the bottom for Bitcoin prices is probably in for 2018.