Less than a month after ProShares launched the first bitcoin ETF in the markets, investment firm VanEck’s Bitcoin Strategy ETF .
Futures are derivative financial contracts that obligate the parties to transact an asset at a predetermined future date and price.
In its marketing and publicity material, VanEck is emphasizing its relatively cheaper costs and taxation as compared to other, similar funds.
According to Laurent Kssis, director of CEC Capital, XBTF’s low fees are “compressing downwards” the charges for bitcoin ETFs at a much faster than in Europe.
In a C-corporation structure, the fund is responsible for paying corporate taxes at the federal, state, and local level, whereas RICs are designed as pass-through entities.
A C-corporation is more tax-efficient for long-term investors, such as large investment firms, because it allows them to spread their tax obligations over a period of time.
The other issues for XBTF remain the same as for other bitcoin futures-based ETFs that are currently trading in the markets.
Investors might also be on the hook for significant rolling costs as monthly futures contracts expire and the fund rebalances its holdings.