Bitcoin ETF News

Fidelity Canada Officially Launches Bitcoin ETF & Mutual Fund.

For Canadian consumers, holding such ETFs in registered accounts can either completely offset or minimize capital gains tax payments, as per Fidelity.

Fidelity Canada announced the launch of the Fidelity Advantage Bitcoin exchange-traded fund (ETF) and the Fidelity Advantage Bitcoin ETF Fund (mutual fund) on Thursday, marking the first time such assets have been made available in the country and confirming previous reports. The funds are traded on the Toronto Stock Exchange under the tickers FBTC and FBTC.U and are denominated in Canadian and US currencies. The Bitcoin ETFs from Fidelity are designed to follow the performance of Bitcoin’s (BTC) spot price. Fidelity now manages assets of CA$208 billion ($162.27 billion) in Canada.

The ETFs will have a 0.4 percent annual management charge. Because the assets are still new, operating expenses and trading costs are not yet available. Over 98 percent of the fund’s Bitcoin purchases are kept in cold wallets.

The consequences are substantial for Canadian retail investors who purchase Bitcoin ETFs through government-registered accounts such as the Tax-Free Savings Account (TFSA). Securities kept in a TFSA are exempt from the capital gains tax, as the name implies.

The yearly contribution limit for a TFSA has varied between CA$5,000 ($3,903) and CA$10,000 ($7,807) since 2009. Unused contributions from past years are carried forward, making them cumulative. Furthermore, all realized earnings in the TFSA are returned to the contribution room. If an investor buys $10,000 in a Bitcoin ETF and sells it for $20,000, the additional capital gain from reinvesting the entire $20,000, not just $10,000, will be eligible for capital gains tax exemption.

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