Ninepoint, a Canadian alternative investment management firm, has proposed a change in its bitcoin exchange-traded fund (ETF) investment strategy. The proposed change involves diversifying the ETF’s investment beyond solely purchasing bitcoin to include other equities related to Web3 and blockchain.
According to its website, the Ninepoint Bitcoin ETF (BITC.CA) is an exchange-traded fund traded on the Toronto Stock Exchange (TSX) with around $21 million in assets under management. The fund’s primary objective was to expose investors to bitcoin without buying the digital asset through a cryptocurrency exchange. Nonetheless, as the value of bitcoin has decreased by 47% in the last twelve months, Ninepoint has declared its intention to modify its investment strategy and diversify its holdings, according to a statement.
According to a statement, Ninepoint has proposed changing the investment objectives of its fund to seek capital appreciation by investing in a diversified portfolio primarily consisting of equity and equity-related securities of companies that provide exposure to emerging technologies such as Web3, blockchain and digital asset-enabled internet.
The ETF has gained approximately 41% this year but lost about 45% in the previous 12 months and has lost 15% since its inception, according to the website. Purpose Bitcoin ETF (BTCC.CA), another Canadian bitcoin fund, has likewise decreased by nearly 50% over the past year.
The current bearish trend in cryptocurrency has also impacted other exchange-traded funds (ETFs). For instance, Cosmos, which offered Australia’s first bitcoin ETF, recently announced that it would delist its Purpose Bitcoin Access ETF (CBTC) and Purpose Ethereum Access ETF (CPET) due to low trading volumes.
Changes to Ninepoint are contingent on unitholder approval and TSX and other regulatory approvals. According to the statement, if authorized, the new investment strategy will go into effect in May and alter its name to Ninepoint Web3 Innovators Fund with the ticker symbol TKN.
According to Ninepoint, Web3 is a new concept for the internet that includes decentralization, digital assets, and blockchain technologies. The company stated that, like previous eras of the internet, the businesses that utilize its potential could have an impact on various industries in the economy, such as finance, telecommunication, energy, media, and more.