Holding such ETFs in registered accounts can either entirely offset or
reduce capital gains tax liabilities for Canadian customers.
On Thursday, Fidelity Canada officially launched
the Fidelity Advantage Bitcoin exchange-traded fund (ETF) and the
Fidelity Advantage Bitcoin ETF Fund (mutual fund), marking the first
such assets to be made available in the country and confirming earlier reports on the matter.
The funds have the tickers FBTC and FBTC.U, denominated in Canadian and
United States dollars, and are listed on the Toronto Stock Exchange.
Fidelity's Bitcoin ETFs seek to track the performance of Bitcoin's (BTC) spot price. Fidelity currently manages CA$208 billion ($162.27 billion) in assets in the country.
The
ETFs will have an annual management fee of 0.4%. Operating expenses and
trading costs are not yet available as the assets are still new. Over
98% of Bitcoin purchased by the funds is stored in cold wallets.
The
implications are significant for Canadian retail investors who open
government-registered accounts, such as the Tax-Free Savings Account
(TFSA), and purchase Bitcoin ETFs. As the name implies, securities held
in a TFSA are exempt from capital gains tax liabilities.
Since
2009, the annual contribution limit for a TFSA has ranged from CA$5,000
($3,903) to CA$10,000 ($7,807). Unused contributions from the previous
years are carried forward, making them cumulative. In addition, all
realized profits accrued in the TFSA are added back into the
contribution room. Hypothetically, if an investor purchases $10,000 in a
Bitcoin ETF and sells them for $20,000, then further capital
appreciation from reinvesting the full $20,000, not $10,000, will be
eligible for capital gains tax-exemption.
source link : https://cointelegraph.com/news/fidelity-canada-officially-launches-bitcoin-etf-and-bitcoin-mutual-fund
