October 1 – 7, 2019 | Canadian Fintech, Institutional Developments, and More

North iQ Weekly Newsletter is curated to provide insights on digital asset industry developments, market announcements, and performance analysis.

Canada Needs to Take More Chances With Fintech

October 2 – An article on Financial Post has suggested that Canadian regulators and lawmakers have been too cautious and slow to adapt to fintech, putting Canada at risk to falling further behind other world leaders such as China and India in consumer adoption. According to Ernst & Young’s 2019 Global Fintech Adoption Index, Canada is 14 points behind the global average of 64% for consumer fintech adoption. While fintech adoption in the United States is 18 points behind the global average, the country hosts a vibrant startup funding ecosystem and maintains a historically aggressive approach towards legislative changes. “Despite numerous government consultations, fintech-related legislative changes have been rare and slow-moving, and some proposed rules — like the CSA / IIROC framework for crypto-asset trading platforms — may increase regulatory costs rather than reduce entry barriers,” said the article.

Read the full article from Financial Post here.

Canadian Bitcoin Mining Firm Hut 8 Gets Uplisted to the TSX

October 3 – The Canadian bitcoin mining company Hut 8 (TSXV:HUT) has announced that it will become the first crypto-focused company to list shares on the Toronto Stock Exchange. Hut 8 will begin trading on the Toronto Stock Exchange on October 8, 2019. In a recent press release, Hut 8 announced that it had met all the necessary requirements to uplist to the Toronto Stock Exchange from the TSX Venture Exchange, apart from raising money through a public prospectus. The company has so far raised over $100 million CAD through private placements and debt. “The TSX is the fourth-largest exchange in North America and one of the largest in the world. Being listed on the TSX will broaden the investor audience for Hut 8 and the hope is that will lead to more investor interest and liquidity for the shares,” said Andrew Kiguel, the CEO of Hut 8.

Read the full article from Bitcoin Magazine here.

What it’s Like to be CIO of a Crypto Fund

October 6 – Jeff Dorman, the Chief Investment Officer of Arca Funds, has provided an insightful overview on what it takes to run a crypto-focused investment fund. Jeff Dorman is a CFA charterholder and has spent 18 years on Wall Street and in fintech before pivoting towards crypto-centric fund management. Dorman notes that starting a successful crypto fund can be incredibly complex as service providers, systems, tools, and valuation techniques are essentially “brand new”, meaning the fund company is working with an “incomplete deck” as it attempts to increase its assets under management (AUM). Dorman highlights that operational processes are the most time-consuming factors for starting a successful crypto fund. In traditional asset management, operations teams may evaluate new service providers around three times per year. Within crypto fund management, Dorman notes that the evaluation of service providers occurs around three times per week, as there are “no incumbents that dominate” and the “barriers to entry as a service provider are near zero”. Dorman claims that managing risk in a crypto fund can be exhausting, as crypto markets are open 24/7 and momentum doesn’t necessarily stop at the end of a typical trading week. “While 24/7 trading is a feature and not a bug of crypto investing, there are some benefits to the legacy financial system’s trading hours. Even the worst weeks come to an end, allowing the market to collectively reset. In crypto, there is no reset (unless forced upon participants manually), so momentum has no natural off switch,” said Dorman.

Read the full article from CoinDesk here.

Institutional Interest for Cryptoassets is Growing as Exposure Increases

October 6 – A comprehensive report from BlockFi has analyzed institutional activity towards cryptoassets within the United States. The report pulled data from hundreds of funds across the country by analyzing SEC-required filings of business activities for mentions of cryptoasset terminologies such as “bitcoin”, “crypto”, or “digital currency”. The report notes that of the 40,000 total registered investment advisors in the country, 10,500 of them manage private funds such as private equity funds, VC funds, or hedge funds. Surprisingly, only 201 of these funds have cryptoasset-related exposure. Of the 201 private fund managers invested in cryptoassets, 18 of them have a total wealth of over $1 billion USD. Combined, these 18 managers have $286 billion in assets under management (AUM). While institutional interest in the cryptoasset sector has been growing, it’s still in its relative infancy, as just $3-5 billion USD in AUM from these managers has moved into cryptoassets thus far.

Read the full report from BlockFi here.

Bitcoin Trading Volume in Hong Kong Hits New High as ATMs Run Out of Money

October 6 – While protests in Hong Kong continue to escalate, residents are beginning to report that many ATMs across the region are now empty. Long lines are also beginning to form around ATM machines across Hong Kong as residents have attempted to withdraw cash from their bank accounts. There has been a recent surge in concern that China has been following several protestors in Hong Kong by tracking their digital payments. Kyle Bass, a Chief Investment Officer at Hayman Capital Management, noted on Twitter that the scenarios are beginning to look a lot like “bank runs”, as there is fear that China could pass an emergency bill which could freeze a Hong Kong citizen’s assets arbitrarily. To coincide with banking fears across the region, there has been a recent surge in bitcoin trading volume within Hong Kong. LocalBitcoins, an over-the-counter (OTC) trading platform, saw the highest ever trading volume in Hong Kong this past week, suggesting that some residents are choosing to move their assets to bitcoin in efforts to protect themselves.

Read the full article from BeInCrypto here.

3iQ Bitcoin Trust (Class A) : NAV as at October 4, 2019

Underlying cryptoasset prices sourced from Bloomberg.View charts and more fund data at here.

3iQ Global Cryptoasset Fund (Class A): NAV as at October 4, 2019

Underlying cryptoasset prices sourced from Bloomberg.View charts and more fund data at here.

3iQ Corp. (“3iQ”) is the first Canadian investment fund manager to agree to terms and conditions with the Canadian securities regulatory authorities which permit 3iQ to manage a multi-cryptoasset investment fund available to Canadian accredited investors. 3iQ provides accredited investors with exposure to bitcoin, ether, and litecoin through its 3iQ Global Cryptoasset Fund.

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This Weekly Cryptoasset Newsletter is for informational purposes only and does not constitute, either explicitly or implicitly, any provision of services or products by 3iQ Corp (“3iQ”). Investors should determine for themselves whether a particular service or product is suitable for their investment needs or should seek such professional advice for their particular situation.3iQ Corp. makes no representation or warranty to any investor regarding the legality of any investment, the income or tax consequences, or the suitability of an investment for such investor. All content is original and has been researched and produced by 3iQ unless otherwise stated therein. No part of the content may be reproduced in any form, or referred to in any other publication, without the express written permission of 3iQ. All statements made regarding companies, securities or other financial information contained in the content or articles relating to 3iQ are strictly beliefs and points of view held by 3iQ and are not endorsements of any company or security or recommendations to buy or sell any security. No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. By visiting and/or otherwise using the 3iQ website in any way, you indicate that you understand and accept the terms of use as set forth on the website and agree to be bound by them. If you do not agree to the terms of use of the website, please do no access the website or any pages thereof. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with 3iQ with respect to any linked site or its sponsor, unless expressly stated by 3iQ. Any such information, products or sites have not necessarily been reviewed by 3iQ and are provided or maintained by third parties over whom 3iQ exercises no control. 3iQ expressly disclaims any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites. The information contained herein, while obtained from sources believed to be reliable, is not guaranteed as to its accuracy or completeness and confers no right on purchasers. Past performance of cryptoassets is not indicative of future performance and should not be used to forecast any return that an investor may realize.

Fred Pye

Frederick T. Pye


Frederick T. Pye is the Chairman, Chief Executive Officer and Director of 3iQ Corp. He is also the Chairman and Director of 3iQ Digital Holdings Inc. Mr. Pye is recognized for creating and promoting creative and unique investment products for the investment industry.

Mr. Pye has managed private client portfolios with Landry Investment Management and various other investment dealers. Prior to this Mr. Pye was Founder, President & Chief Executive Officer of Argentum Management and Research Corporation, a company dedicated to managing and distributing quantitative investment portfolios including the first long-short mutual fund in Canada.

He was also Senior Vice-President and National Sales Manager of Fidelity Investments Canada and an integral part of the team that saw assets rise from $80 million to over $7.5 billion in assets under management during his tenure. He also held various positions with Guardian Trust Company, which listed the first Gold, Silver and Platinum Certificates on the Montreal Exchange.

Mr. Pye obtained a Masters in Business Administration from Concordia University.