Psst! You Can Get A Bitcoin ETF Here

www.forbes.com
4 min read
fairly easy
While you're waiting for an exchange-traded crypto fund in the U.S., check out what's on sale in Toronto or Frankfurt.
Bitcoin Funds Forbes

The august securities authorities in the U.S. have yet to approve an exchange-traded fund for cryptocurrency. But bitcoin ETFs are up and running in Canada and Europe. You can get your hands on shares, if you know where to look.

I went hunting for brokerage firms that allow their U.S. customers to buy overseas funds and ran into a lot of closed doors. Vanguard and Morgan Stanley's E-Trade division don't allow any trading on foreign exchanges. Charles Schwab lets you buy shares of foreign companies but not foreign funds. Interactive Brokers displays foreign ETFs on its site but forbids U.S. retail clients to buy them.

Fidelity Investments? Eureka. Of nine overseas crypto products on my shopping list, Fidelity has seven for sale to Americans (see table). For reasons it does not elaborate, it won't let you acquire either of two European-traded CoinShares products shown in the table, although you can get a Canadian fund that is affiliated with CoinShares.

The table includes both ETFs and exchange-traded notes, which are similar to ETFs in market behavior. With either of these legal structures you are trusting the vendor to back up its promises with a stockpile of coins in a well-protected wallet. The notes may also involve the risk of a bankruptcy of the intermediary.

Why are most brokers so squeamish about foreign funds? Evidently they don't dare offend the Securities & Exchange Commission, which sees itself as the supreme arbiter of what is fit for sale on U.S. soil.

The SEC has spent the last seven years swatting down proposals for U.S.-registered ETFs that would hold either bitcoins or bitcoin futures and give investors a way to redeem their shares at something close to asset value. Stated reason: Bad people might manipulate the price of coins.

And yet the agency tolerates another form of crypto fund, one with no redemption feature. The prototype of this genre is the Grayscale Bitcoin…
William Baldwin
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