The fund quickly grew to over $1 billion in assets, becoming the quickest ETF to reach that threshold, according to Bloomberg data.
Offered by ProShares, this new exchange traded fund marks a long-awaited milestone, experts say.
There have been some regulatory hurdles and delays by the SEC in making a Bitcoin-linked ETF available to investors.
When that specified date arrives, you must buy or sell the asset at the agreed upon price, no matter what the actual price of the asset ends up being that day.
There are many assets that trade on futures — usually commodities like oil, grain, or coal.
This may lead to a bit of confusion as the price of the ETF will not necessarily correlate with the price of Bitcoin.
For example, if Bitcoin went up by 30%, the Bitcoin futures ETF might only rise 20%, Hunsberger says.
Bitcoin is still very new compared to conventional stock market investing, so it lacks the historical track record investors can use to anticipate future performance.
Bitcoin is highly volatile, and while there might be a difference between the price of Bitcoin and the price of BITO, the ETF does not protect you from the ups and downs of Bitcoin.
That said, if you’re interested in exposing your current portfolio to cryptocurrency in some way, and are OK with the risks, BITO makes it easier than ever for investors.
Plus you can hold it within tax-advantaged accounts like a Roth IRA or 401, if you choose.
“BITO will open up exposure to Bitcoin to a large segment of investors who have a brokerage account and are comfortable buying stocks and ETFs, but do not desire to go through the hassle and learning curve of establishing another account with a cryptocurrency provider and creating a bitcoin wallet,” ProShares CEO Michael L.
Buying Bitcoin outright does involve its own set of fees, depending on which exchange you use, method of account payment, and other factors.
Specialized ETFs, like BITO, often come with a higher expense ratio, meaning they’re more expensive for you.
While you can place orders during off-market hours, the orders will not fill until the stock market opens.
There has not yet been sweeping regulation for cryptocurrency exchanges, and as such, each exchange operates on different rules.
This insurance covers accounts up to $500,000 in securities if a brokerage is closed due to bankruptcy or other financial difficulties and customers’ assets are missing from accounts.
Some are frustrated about the futures asset, which adds another layer of complexity to an already complicated subject.
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