Greg Taylor, Chief Investment Officer at Purpose Investments joins the Yahoo Finance Live panel to discussthe Purpose Bitcoin ETF.

Video Transcript

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ZACK GUZMAN: Welcome back to Yahoo Finance Live and today's first, the debut of our "Crypto Corner" segment here, spotlighting the wild week it's been so far for Bitcoin, back above that $51,000-per-coin level. We've seen a lot of headlines on the corporate front of companies adding to their Bitcoin holdings, including Square throwing another $170 million at acquiring more Bitcoin.

But we also got last week the big launch of the first-ever Bitcoin ETF, launching up in Canada. It's off to one of the hottest starts, if not the hottest start, in ETF history there, crossing half a billion in assets under management as money continues to flow into that fund over what has been so far a short-lived life.

Let's bring on right now the fund behind that, Purpose Investments. We're joined here by the chief investment officer at Purpose Investments. Greg Taylor joins us now. And Greg, as I said, a very hot start, but talk to me about how exciting it is, maybe, to see the demand and where that demand is coming from given that this is the first ETF for Bitcoin.

GREG TAYLOR: Yeah, yeah, thanks for having me. Yes, it's been very exciting, and I think it's been a while coming that everyone's been looking for an ETF option to buy Bitcoin. Certainly, Bitcoin-- sorry, ETFs have had a good history in commodities of getting a lot of investor attention from both retail and institutions, and we're happy to launch with the first Bitcoin ETF globally. And we're starting to see that response of how much pent-up demand was.

A lot of people have wanted to get exposure to Bitcoin, but they haven't really wanted to go through the hoops of opening up their own account and their own wallet to do so, or trading some of the other closed-end funds. And having the ETF option, I think, has always been, really, the Holy Grail out there. And we're happy to have a trading, and we're seeing the results of some of that pent-up demand.

ZACK GUZMAN: Yeah, talk to me about why this is different than, perhaps, you know, some of those trusts out there that we've seen-- a lot of attention around the Grayscale Trust, their Bitcoin trust-- and how this is different. Why choose this ETF over that, and maybe perhaps even holding Bitcoin through a digital wallet?

GREG TAYLOR: Yeah. Well, certainly holding Bitcoin itself through a digital wallet, for those that can, would be a good situation. But you really have to monitor it yourself. You have to keep your passwords. You have to keep your wallet going, and we've had a lot of problems with theft in the past. So there's a lot of hassles involving in doing it yourself-- very similar, again, to the analogy of gold. You can buy gold and put up bar, but you have to store it and look after it. And you can do that with cryptos also, but it's a lot of work to do.

So what's been trading in the market for the last few years has really been these closed-end trusts. And this is a trust that'll be set up with a pool of assets, and then we'll go out and buy Bitcoin to back that. But the problem is, when it trades in the market, it doesn't trade at exactly the net asset value. It can vary with the ebbs and flows of the market to trade at a premium or a discount.

So when you're buying it in the market, you really have to do your work to make sure that you're buying exactly what you want and you're not paying a premium which really can offset the price gains of the underlying commodity, which you're really buying the investment for.

So our fund, when we launched it as a pure ETF, similar to what we have in gold and oil and other commodities, is a product that should trade as close to net asset value all the time throughout the trading session in the market.

AKIKO FUJITA: Greg, I want to get back to the demand question that Zack asked because, while you did launch in Canada, of course, investors around the world can invest in your particular ETF. Where are you seeing the biggest inflows right now?

GREG TAYLOR: So it's been really across the board from both retail and institutions. It's hard with an ETF to figure out exactly where the inflows are coming from, but we've had a lot of people reach out from around the world that want to get access to this product. We can't market outside of Canadian institutions, but anyone that does trade on the TSX and anyone that has access to trade in the TSX can purchase it.

We are surprised to see a very big demand from the institutions that are looking, again, for an efficient way to get exposure to Bitcoin and don't have a means to do that in other areas. So a lot of demand, I'd say, would be probably skewed in favor of the institutions right now, but it's really been broad-based and international.

ZACK GUZMAN: And let me ask you this, too. When it comes to that demand right now, if this is what you're seeing in such an early stage, who knows if we'll see, you know, you guys cross $1 billion AUM, or when that happens. But what does that maybe signal to you about launching ETFs beyond just Bitcoin and kind of the regulatory questions or overhangs that might still be there?

GREG TAYLOR: Well, I think, really, the delay in getting a cryptocurrency ETF was all about just waiting for the ecosystem to evolve to be ready to be rigorous to meet the demands of the financial markets. And I think it's a credit to the entire system that this ETF was approved, as the Ontario Securities Commission, which approved the ETF, was able to get comfortable around how Bitcoin has been traded, how it's been custodied, and how we can maintain the security and make sure it does trade in a fluid manner. And we were able to answer all of those questions around Bitcoin to the manner to get this approved.

We do want to look beyond this. I think there's going to be a lot of other cryptocurrencies that will make the leap beyond just trading in their traditional sense to looking at an ETF. We'd like to be involved in that at some point, and we're certainly going to explore those options. But I'd be surprised if this is going to be the only cryptocurrency that has an ETF in the next year.

AKIKO FUJITA: Yeah. I mean, how big do you think it gets? You certainly have the first-mover advantage. Evolve Fund Group, the other one that came into the market just a day after you, they've sort of been very aggressive in trying to be a little competitive in their pricing-- just two right now. But how big does this get?

GREG TAYLOR: Well, it's certainly going to have a lot of attention. And when you've got a lot of attention on the sector, you're going to get a lot of people that will follow on behind it. Certainly, everyone's waiting for the US to launch an ETF. So what we're trying to do is do as good a job to make sure that we're trading at net asset value, offering liquidity. We had options listed on our ETF yesterday on the Montreal Exchange.

And it's really just building the ecosystem to make sure that-- if our fund can trade as close to NAV, offer liquidity, and offer it to institutions around the world, I think we can do as much as we can to defend our market share. But certainly, when you've got an asset class that is this big and has this much investor attention, you're going to get a lot of people that are going to try and copy it and try and get into the space as well.

AKIKO FUJITA: We've already seen a huge pop in the short time that you have had since you launched. Greg Taylor, the CIO at Purpose Investments, it's good to talk to you today.