Assets have pared back a little, of course, in part due to a dramatic drop in Bitcoin's price, but the cryptocurrency ETF still boasts 10 digits' worth of assets. BITO amassed $1.4 billion in assets in less than a month of existence. It is an exclamation point on the adoption of digital assets that we’ve seen in 2021.'Īn exclamation point indeed. It brings in a new class of investors, who are more comfortable in traditional finance, into the fold of cryptocurrencies. 'It opens up a potential new batch of buyers who are more comfortable with ETF’s and makes digital assets more appealing. 'A Bitcoin ETF helps ratify cryptos relevancy in today’s economy,' says Chris Kline, COO and co-founder of Bitcoin IRA. Nonetheless, BITO's approval is a milestone for the ETF industry.

'Futures-based products do not necessarily replicate the performance of the underlying market and incur costs as the asset manager rolls forward the contracts it uses,' Rosenbluth says. Investors looking for context should know that BITO will moreso resemble the United States Oil Fund ( USO), which also invests in futures and does not accurately track the price of oil, rather than 'physical' ETFs such as the SPDR Gold Shares ( GLD), which invest directly in the underlying asset to provide much more faithful price tracking. Treasury Bills and Repurchase Agreements as short-term investment vehicles for cash positions, and it can also use leverage. These contracts are only traded on the Chicago Mercantile Exchange and are subject to the rules of the CME. The futures contracts that BITO invests in are regulated by the Commodity Futures Trading Commission. Instead, it invests in cash-settled, front-month Bitcoin futures – contracts with the shortest time to maturity. The most important thing to note right off the bat is that BITO does not invest directly in Bitcoin, which provides as close to one-to-one exposure as you could want. ETF to provide investors with exposure to Bitcoin futures. The ProShares Bitcoin Strategy ETF ( BITO, $24.91), which launched on Oct. Here are 18 Bitcoin ETFs and other cryptocurrency funds available to investors today. This includes the Bitcoin futures ETFs, but the majority of these products either deal in equities that are somehow involved with cryptocurrencies, or in other types of exposure that have their own twists and turns. Meanwhile, fund providers have been adding even more products to the heap, so Wall Street is flush with crypto-focused investment options. further on the path to crypto regulation and could bring the asset class even closer to the mainstream.

Still, digital currencies should see no dearth of interest, especially after President Joe Biden's recent cryptocurrency executive order, which puts the U.S. In November, the commission rejected a VanEck spot Bitcoin ETF, and as recently as March 2022, it shot down offerings by NYDIG and Global X. Thus, ETFs that directly hold cryptocurrencies appear off the table (for now). However, the launch of BITO and a second Bitcoin futures ETF in October suggested the SEC was perhaps also coming around to the idea of U.S.-listed ETFs holding 'physical' Bitcoin.

SEC Chair Gary Gensler has said in the past that he would prefer to see funds holding Bitcoin futures rather than the cryptocurrency itself. As early as 2013, the Winklevoss twins, founders of the Gemini cryptocurrency exchange, looked to start a Bitcoin ETF but were unsuccessful. That step was a long time in the making, too. 'This is a milestone for the ETF industry,' Todd Rosenbluth, head of ETF and mutual fund research for independent investment analysis outfit CFRA, said at the time.

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