Futures generally are volatile and are not suitable for all investors. The Fund intends to elect and to qualify each year to be treated as a RIC under Subchapter M of the Code. As a RIC, the Fund will not be subject to U.S. federal income tax on the portion of its net investment income and net capital gain that it distributes to Shareholders, provided that it satisfies certain requirements of the Code. The Fund is classified as “non-diversified” under the 1940 Act. As a result, the Fund is only limited as to the percentage of its assets which may be invested in the securities of any one issuer by the diversification requirements imposed by the Internal Revenue Code of 1986, as amended.

1. For starters, it’s listed on the New York Stock Exchange’s NYSE Arca platform, which means it is trading on a premier platform for exchange-traded funds.
2. People who write reviews have ownership to edit or delete them at any time, and they’ll be displayed as long as an account is active.
3. BTCO is waiving its official 0.25% fee to zero for the first six months on the first $5 billion in assets.
4. A simulation of BITX back to 2014 provides some data on how this Exchange Traded Fund (ETF) might perform in the future.

All content on this site is provided for informational and entertainment purposes only and is not intended for trading purposes or advice. This site is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. It is not intended as advice to buy or sell any securities. Please do your own homework and accept full responsibility for any investment decisions you make. Many of the products/companies that I mention in my posts advertise on this site and I receive revenue from those advertisements. It’s not surprising that Volatility Shares chose to use Bitcoin futures rather than Bitcoin as the underlying security for BITX.

Architecturally, BITX is structured as a 2X leveraged, daily resetting, exchange-traded fund. Volatility Shares, the issuer of BITX, seeks to have the ETF deliver twice the daily percentage moves of a mix of short-term CME Bitcoin futures. When choosing a bitcoin ETF, investors should take into account their personal financial goals, investing timeline and risk profile.

Not knowing how dividends work and all, I felt that this was sketchy and there must be some risk or disadvantage we don’t know about. However, my family brushes off my concern that this feels off. They said that money can’t be made without taking risks and that I’m too pessimistic. They are also thinking about switching to BITX, now that it pays out dividend. They are so excited about it and convinced to keep BITO in their portfolio even if it goes down in the future.

Bitcoin Strategy ETF (BITX)

As has often been the case throughout cryptocurrency’s short history, many other cryptocurrencies—often called altcoins, due to them being alternative coins to bitcoin—have risen in value in lockstep with bitcoin’s bull run. You should also consider if you’ll ever transfer any bitcoin from your exchange to a separate hot or cold crypto wallet. With 100% of assets invested directly in bitcoin and a big iShares brand behind it, IBIT is a major player in the space. It is also likely to survive any consolidation that strikes the crowded field of digital asset ETFs in the months and years ahead. Thankfully, now they are fully aware of the risk; they aren’t going to pull out of all of their funds from BITO right away, but they are planning to slowly switch their focus to other stocks and ETFs. Please bear with us as we address this and restore your personalized lists.

Are bitcoin ETFs a good investment?

After years of anticipation, the Securities and Exchange Commission finally opened the door to 11 spot bitcoin ETFs in 2024. So far, the other 10 are dwarfed by Grayscale Bitcoin Trust. That fund, GBTC, debuted in 2013 as a trust, and is now an ETF.

ProShares Bitcoin Strategy ETF (BITO)

Recently I think BITX had started bitx anka to give out dividend money so they were talking about investing in there too. We were initially looking for stocks, but my mother has recently come across some bitcoin ETFs, mainly BITO and BITX. Bitcoin is a new technological innovation with a limited history. There is no assurance that usage of bitcoin will continue to grow. A contraction in use of bitcoin may result in increased volatility or a reduction in the price of bitcoin, which could adversely impact the value of the Fund.

You must do research before buying a bitcoin ETF, so you fully understand how it is structured. Bitcoin is a relative newcomer to the world of exchange-traded funds. Bitcoin and bitcoin futures are relatively new investments.

They are subject to unique and substantial risks, and historically, have been subject to significant price volatility. When first introduced in late 2017, there was speculation that Bitcoin futures would not closely track Bitcoin’s daily (spot) price, but Bitcoin futures have proved to be a good proxy for Bitcoin. This performance is not surprising given how futures really work. The popular notion of futures is that they are vehicles for wild speculation, subject to huge unpredictable swings.

However, history shows that many ETFs ultimately change to a different strategy or de-list altogether. The iShares Bitcoin Trust ETF is one of the emerging leaders after January’s regulatory moves, thanks to a surge of shareholder money inflow. That is in part because sponsor BlackRock waived a portion of fees until total assets reached $5 billion to attract new investors.

With a few hundred million in assets, BTCO is gathering support that could cement it as one of the few 100% bitcoin funds that might have staying power. That presumes that investors who recently piled in because of the fee waiver don’t bolt if the waiver expires this summer. Invesco Galaxy Bitcoin ETF, another spot bitcoin fund, is on our list because of its generous approach to winning new business. BTCO is waiving its official 0.25% fee to zero for the first six months on the first $5 billion in assets.

1. Instead, the Fund seeks to benefit from increases in the price of bitcoin futures contracts for a single day.
2. Some investors may feel safer getting exposure to bitcoin in their portfolios by purchasing a professionally managed ETF than they do owning actual BTC.
3. BITB also boasts a hefty level of assets under management thanks to a short-term fee waiver that made it free to trade until the fund hit $1 billion in AUM.
4. An investor in the Fund could potentially lose the full value of their investment within a single day.
5. If a retirement investor would like to get a modest amount of exposure to bitcoin without opening an account at a crypto exchange or a bitcoin IRA, owning shares of a bitcoin ETF is a reasonable alternative.
6. That explains why the total net assets are tiny for ProShares Short Bitcoin ETF and why its performance has been abysmal.
7. And as a result, shares often traded at a big premium or discount to the actual value of the underlying bitcoin.

On June 27th,2023 Volatility Shares introduced BITX, the first 2X leveraged Bitcoin Exchange Traded Fund. This post will review BITX’s architecture, operational characteristics, likely risks, possible rewards, and potential trading strategies. A simulation of BITX back to 2014 provides some data on how this Exchange Traded Fund (ETF) might perform in the future. As more and more money flows into spot bitcoin ETFs, these ETFs have been able to purchase more bitcoin, thus decreasing bitcoin’s supply while increasing its demand. This has led to a significant price increase in bitcoin since the approval of spot bitcoin ETFs. Some investors may feel safer getting exposure to bitcoin in their portfolios by purchasing a professionally managed ETF than they do owning actual BTC.

Trading StrategiesAlthough most holders of BITX will likely be short term traders, some will try to capture a future sustained run-up of Bitcoin prices by just buying and holding. However, even if that strategy is successful, any windfall gains will likely fade quickly away if BITX is held for a long time. S&P Global has computed values for BITX’s tracking index, SPBTFDUE, starting from late 2017, when CME Bitcoin futures started trading.

The Fund has a single day investment objective, and the Fund’s performance for any other period is the result of its return for each day compounded over the period. Short term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. Even if Bitcoin goes on to set new all-time highs, investors that buy BITX and never sell will very likely end up disappointed. On the other hand, BITX offers an aggressive trader a product that’s able to significantly compound Bitcoin gains, without the need for additional capital, or risking more than they invested.