Cheaper is Better: The Lowest Fee Bitcoin ETFs for Canadian Investors

Canada may have been first out of the gate with spot Bitcoin ETFs, but the U.S. has since caught up, and then some. When the U.S. approved spot Bitcoin ETFs in January 2024, the market exploded in size, with assets ballooning to many times that of Canadian counterparts. A big reason? Lower fees.

To win market share, several U.S. issuers launched with aggressive fee waivers, in some cases dropping management fees to 0% on the first several billion in assets like BlackRock iShares did. Grayscale, for example, converted its flagship trust and introduced a cheaper version to stay competitive.

Meanwhile, many of the older Canadian spot Bitcoin ETFs, launched well before the U.S. were still charging 0.40% to 1.00% in management fees. This led some investors to consider converting their currency and buying the U.S. versions, even after factoring in foreign exchange costs.

Thankfully, that’s no longer necessary. Canada now has lower-cost Bitcoin ETFs that are eligible for registered accounts like TFSAs, RRSPs, and FHSAs. Here are two of the cheapest options currently available from iShares and Purpose Investments.

iShares Bitcoin ETF (IBIT)

iShares brought IBIT to the Canadian market in early 2025, and if there’s any firm capable of running a Bitcoin ETF as a loss leader to win domestic market share, it’s BlackRock.

The fund tracks the CME CF Bitcoin Reference Rate – New York Variant, providing price exposure to spot Bitcoin. The actual crypto is held in cold storage with Coinbase Prime acting as custodian, and only moved to a hot wallet when needed for ETF creations or redemptions, which is an industry-standard security practice.

IBIT debuted on January 8, 2025, and has had a solid start, already amassing $180 million in AUM. It charges a 0.32% management fee, which is among the lowest in Canada for spot Bitcoin exposure.

The MER hasn’t been reported yet, since the fund hasn’t completed a full year, but I’d estimate it will come in around 0.40% once operating expenses are factored in.

Purpose Core Bitcoin ETF (BTCO.B)

If you'd prefer to stick with a Canadian ETF issuer, and given the current political climate, that’s a reasonable call, BTCO.B from Purpose Investments is worth a look.

Purpose made history by launching the world’s first spot Bitcoin ETF, and BTCO.B is its newer, lower-cost version. It’s designed specifically for buy-and-hold investors looking for more affordable long-term exposure, unlike the firm’s older flagship Bitcoin ETF, which is more liquid but also more expensive.

The “.B” suffix indicates this is the unhedged version, meaning the ETF is priced in Canadian dollars, but the underlying Bitcoin is priced in U.S. dollars. If the CAD strengthens, it can reduce returns; if the USD rises, it can boost them. But given how volatile Bitcoin already is, the impact from currency movements tends to be minimal.

BTCO.B undercuts IBIT, charging a 0.29% management fee, which is very competitive. For context, that’s almost identical to the 0.28% fee charged by a passive equity fund like Vanguard’s U.S. Dividend Appreciation Index ETF (VGG).

Like IBIT, BTCO.B hasn’t been around for a full year yet, so there’s no official MER. But if Purpose manages operational costs efficiently, a final MER of 0.34% or lower seems like a realistic expectation.