Investment Firm Ninepoint Proposes Switching Bitcoin ETF Strategy After Falling 45% in a Year
The fund will now seek to invest mainly in equity and equity-related securities of companies with exposure to Web3, blockchain and the digital asset-enabled internet.
Canadian alternative investment management firm Ninepoint is proposing changing the investment strategy of its bitcoin exchange-traded fund (ETF) to diversify from just buying bitcoin into other Web3 and blockchain-related equities.
The fund, Ninepoint Bitcoin ETF (BITC.CA), is traded on the Toronto Stock Exchange (TSX) and has about $21 million in assets under management, according to its website. It previously aimed to provide investors exposure to bitcoin, without having to buy the digital asset through a crypto exchange. With the price of bitcoin falling about 47% in last 12 months, Ninepoint is now proposing changing its strategy to diversify its holdings, according to a statement.
"Ninepoint proposes changing the investment objectives of the Fund to be to seek to provide Unitholders with capital appreciation by investing in a diversified portfolio comprised primarily of equity and equity-related securities of companies that give investors exposure to emerging technologies such as Web3, the blockchain and digital asset-enabled internet," the statement said.
The ETF is up about 41% this year but has fallen roughly 45% in the last 12 months and is down 15% since inception, the website said. Another Canadian bitcoin fund, Purpose Bitcoin ETF (BTCC.CA) has also fallen about 50% in last 12 months.
This isn't the first ETF to get stung by the brutal crypto winter. Last year, Cosmos' bitcoin ETF, which was Australia's first such fund, said it would delist its Purpose Bitcoin Access ETF (CBTC) and Purpose Ethereum Access ETF (CPET) due to muted volumes.
Ninepoint's change is subject to the fund's unitholders vote, as well as approval from TSX and other regulators. If approved, the new investment strategy will become effective in May and will change its name to Ninepoint Web3 Innovators Fund with the ticker TKN, according to the statement.
"Web3 is a new vision of the internet, incorporating concepts such as decentralization, digital assets and blockchain technologies," Ninepoint said. "As with previous eras of the web, the companies that harness its potential could have an impact on every industry in the economy from finance to telecommunication, energy, media and beyond," it added.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.