Purpose Investments eyes more innovation after bitcoin ETF success

From crypto to DeFi, Purpose has an ambitious global plan

Purpose Investments eyes more innovation after bitcoin ETF success

Following the success of its one-year-old Purpose Bitcoin ETF, Purpose Investments Inc. is launching the concept on the other side of the world - in Australia. It's also putting the finishing touches on a “very ambitious roadmap” of new DeFi and crypto innovation funds for 2022.  

“We’re bringing the first Bitcoin ETF to Australia by early March,” Vlad Tasevski, Purpose’s chief operating officer and head of products told Wealth Professional.

“It’s going to be a separate fund, but the reason that’s possible is because we’ve launched this one here [in Canada], which works really well. So, the Australian fund will be using our fund to get exposure to Bitcoin. That provides more comfort level for the Australian regulators to approve the Australian plan because it will be investing in a strategy that has already been approved by Canadian regulators and has been successfully operating for a year now.”

The Purpose Bitcoin ETF, which the company launched a year ago today, was the world’s first Bitcoin ETF backed by physically settled Bitcoin. Within a month, it amassed $1 billion of assets under management, making it one of the fastest-growing ETFs ever launched, demonstrating the huge investor demand for a secure, easy way to get Bitcoin exposure.

Tasevski said the fund has attracted both individual and institutional investors, particularly the large pension funds, and now has $1.7 billion. The year-to-date return was down about 3.9%, which is in line with Bitcoin pricing, but February’s return is up 14.6%.

“We are seeing real traction, even though there is still a large number of both individual retail investors but, even more importantly, institutional investors who still have not entered the space,” said Tasevski. “I think we’ll see a broader adoption as time goes by. But, what we have done is give them the best way to get exposure to this asset class.”

Purpose launched five crypto ETFs last year, including three more actively-traded cryptocurrency focused funds at the end of November. But Tasevski said its Purpose Bitcoin ETF was “a really truly global innovation, which ultimately merged the traditional world and cryptocurrency world, and that was really important globally.”

He said the structure has worked extremely well in providing exposure to a different asset class that “operates outside the rails of transitional finance”. It’s provided investors with a safe, easy, and convenient way to access Bitcoin, especially after some unregulated channels caused investors “meaningful losses”. He said the fund has addressed those “pain points”, but it’s also positioned Canada, and Purpose, as a global leader.

“We saw meaningful global traction. Our Bitcoin ETF has investors from all over the world, in all sizes, from the small investor, who has probably invested a couple hundred dollars, all the way to the world’s largest pension funds, which are very, very sophisticated investors,” said Tasevski, noting it already has thousands of investors. “This is a really, really broad investor base, and we believe that this is only the beginning.  We see a huge opportunity for what the world of cryptocurrencies and blockchain is going to provide over time.

Purpose plans to expand its strategies and offerings for Canadian investors, but it’s also working on many opportunities to use what it’s developed here to provide global investors with an easier way to get these offerings in their local markets.

“We have a very ambitious roadmap on how we can further extend our product offering, in terms of offering new products, but also providing opportunities to investors in other jurisdictions to get access to our existing products,” he said.

Purpose is also planning to launch its new Purpose DeFi (Decentralized Finance) Opportunities Fund on March 3, which Tasevski said would be an Offering Memorandum (OM) based private ETF since the current regulations don’t allow it to be offered under a prospectus. In early May, it expects to offer a yield-focused cryptocurrency strategy, which will also be OM based. In the longer-term, Tasevski said Purpose also has global expansion plans for Europe, the United Kingdom, Asia, the Pacific, Middle East, and South America.