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Fidelity Advantage Bitcoin ETF and Mutual fund - FAQ

Fidelity Advantage Bitcoin ETF works the same way any other ETF does.

  1. You, as an investor, can invest in the Fidelity Advantage Bitcoin ETF the same way in which you can invest in other ETFs, by purchasing ETF units on the TSX.
  2. Fidelity will then use the proceeds to purchase bitcoin from selected liquidity providers. The bitcoin are then stored via our institutional-grade custodial model.
  3. You, the investor, owns units of the ETF, which in turn owns physical bitcoin.
  4. If you own the ETF Fund, you own shares in a mutual fund that invests in the ETF.

Bitcoin is a digital asset that can be transferred on a peer-to-peer basis among participants on the Bitcoin network. The Bitcoin network is a network of computers, called “nodes”, running Bitcoin software connected via the Internet. The idea for Bitcoin was proposed in a white paper released in 2008, published under the pseudonym “Satoshi Nakamoto.”

A blockchain is a type of ledger that can record cryptocurrency transactions. Cryptocurrency transactions are bunched together into blocks, and the blocks of transactions are cryptographically linked together to form a chain of blocks, hence “blockchain”. Copies of the Bitcoin blockchain exist on thousands of computers across the Bitcoin network.

The ETF purchases bitcoin from approved bitcoin sources. The ETF may purchase bitcoin through Fidelity Clearing Canada (“FCC”), the ETF’s custodian, and FCC purchases its bitcoin through Fidelity Digital Assets, our U.S. partner. Fidelity Digital Asset Services also stores the ETF’s bitcoin as the bitcoin sub-custodian.

Yes, the funds are eligible for registered accounts.

The ETF is offered in CAD with the ticker code FBTC (CAD unhedged units), as well as in USD with the ticker code FBTC.U (USD unhedged units). Each series of the ETF Fund is offered in both CAD and USD

No, at the moment the ETF and the ETF Fund are not available in a currency neutral version.

There are several reasons why you may wish to invest in a Bitcoin ETF or mutual fund, like Fidelity Advantage Bitcoin ETF and Fidelity Advantage Bitcoin ETF Fund, instead of buying cryptocurrency directly.

  1. The ETF and ETF Fund may be held in a tax-advantaged registered account.
  2. The ETF and ETF Fund are easy for you to buy and sell via the same platform where you trade other securities.
  3. There may be decreased pricing risk of individual marketplaces with the ETF and ETF Fund, as our pricing methodology takes prices from a variety of sources as input.

No, you may buy/sell ETF units as you would a regular ETF on an exchange.

No. Although bitcoin trades around the clock, the ETF will only trade during regular market hours, 9:30am ET - 4:00pm ET.

Fidelity Advantage Bitcoin ETF can be bought and sold any time the market is open. Use limit orders and avoid trading at the open (9:30am ET) and close (4:00pm ET). For more information, please see Trading best practices.

Bitcoin has historically been a highly volatile investment, and may not be suited for all investors. The optimal portfolio allocation to bitcoin depends on the nature of the investor’s existing portfolio, investment objectives, risk tolerance and specific investment circumstances. When considering an investment in bitcoin, it is important to remember that although bitcoin may, at the time of investment, present certain characteristics that may make it favourable as a store of value, there is no guarantee that it will succeed as an actual store of value in the future. The valuation of bitcoin, both on an absolute basis as well as relative to other currencies, including fiat currencies, is difficult to evaluate in general.

The future of bitcoin and the Bitcoin network, which is part of a new and rapidly changing industry, is subject to a variety of factors that are difficult to evaluate. Going forward, competitive pressures and/or technological, regulatory or other developments may result in increased volatility and/or a reduction in the price of bitcoin. Blockchain technology as a whole may face challenges that act to hinder its adoption and development, which may have negative repercussions for bitcoin and the Bitcoin network. Investors should discuss the specific risks of potential investments with their financial advisor in advance of purchase

Bitcoin futures are offered by traditional, regulated platforms like CME, creating a familiar playing field. In addition, there is no need for custody of bitcoin, as futures are cash-settled.

However, bitcoin futures are generally in “contango” (i.e. the futures price is higher than the spot price of the underlying asset). This premium detracts from return when futures contracts are held in an ETF instead of actual bitcoin. Drivers of bitcoin futures’ contango may include costs of storage and bitcoin’s limited supply. Other factors that may affect the spread between the futures price and the spot price include inflation (positive inflation tends to increase futures price relative to spot price, and vice versa). In addition, Bitcoin futures ETFs may suffer from capacity constraints due to limits on the number of futures contracts an ETF is permitted to hold at any given time.

Overall, a physically-settled bitcoin ETF is expected to better track the price and returns of the underlying asset (bitcoin), compared with a bitcoin futures ETF.

Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated with investments in mutual funds and ETFs. Please read the mutual fund or ETF’s prospectus, which contains detailed investment information, before investing. Mutual funds and ETFs are not guaranteed. Their values change frequently, and investors may experience a gain or a loss. Past performance may not be repeated.

The statements contained herein are based on information believed to be reliable and are provided for information purposes only. Where such information is based in whole or in part on information provided by third parties, we cannot guarantee that it is accurate, complete or current at all times. It does not provide investment, tax or legal advice, and is not an offer or solicitation to buy. Graphs and charts are used for illustrative purposes only and do not reflect future values or returns on investment of any fund or portfolio. Particular investment strategies should be evaluated according to an investor's investment objectives and tolerance for risk. Fidelity Investments Canada ULC and its affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered.

Fidelity Advantage Bitcoin ETF aims to invest in bitcoin. Fidelity Advantage Bitcoin ETF Fund invests in Fidelity Advantage Bitcoin ETF. These funds do not speculate with regards to short-term changes in bitcoin prices. Given the speculative nature of bitcoin and the volatility of the bitcoin market, there is considerable risk that these funds will not be able to meet their investment objectives. An investment in these funds is not intended as a complete investment program and is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment. An investment in these funds is considered high risk.

Fidelity Advantage Bitcoin ETF and Fidelity Advantage Bitcoin ETF Fund are trademarks of Fidelity Investments Canada ULC.

©2021 Fidelity Investments Canada ULC. All rights reserved.

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