ProShares Bitcoin Strategy ETF (BITO) is an exchange traded fund (ETF) that is provided by ProFunds/ProShares and listed on the NYSE ARCA. Find out how to buy this ETF below.
Launched by ETF issuer ProShares and headed by CEO Michael L Sapir, the fund is designed to give investors exposure to the Bitcoin currency.
However, investors don't actually own Bitcoin directly through the fund. Unlike traditional ETFs that buy and sell underlying assets such as stocks, BITO uses futures contracts to profit from Bitcoin price fluctuations.
In other words, it uses contracts that speculate on the future price of Bitcoin. Depending on how volatile the market is, these prices could differ significantly, which means there are additional risks.
BITO's launch is one of the largest on record for an ETF, and it topped $1 billion in assets faster than any other ETF. While it was the first such ETF approved for the U.S., a second Bitcoin futures ETF from Valkyrie Funds, is now due to launch Oct. 22.
The ProShares launch has been so popular that the ETF is nearing some limits on the number of futures contracts it is allowed to hold, according to Bloomberg. Addressing that could mean the ETF doesn't track as closely to Bitcoin's price fluctuations as intended.
To check out other Bitcoin-related ETFs, check out our cryptocurrency ETF guide.
June 25, 2023: Interest in Bitcoin (BTC) has been picking up with lots of intitutional investment interest following news and reports that the world's largest asset manager, BlackRock filed to create its own Bitcoin ETF (exchange-traded fund) earlier this month.
| Dividend paying frequency | N/A |
|---|---|
| Dividend yield | 46.66% |
| Maximum annual management charge | N/A |
| Ongoing charge | N/A |
| Date ongoing charge | 17 December 2024 |
| Net expense ratio | 0.00950 |
| Annual holdings turnover | 2.32000 |
| Total assets | 2646709161.00 |
| Average market capitalisation | No Data |
The fund adviser seeks to achieve its investment objective primarily through managed exposure to bitcoin futures contracts. The fund does not invest directly in bitcoin. The fund adviser will generally hold its bitcoin futures contracts during periods in which the value of bitcoin and bitcoin futures are flat or declining as well as during periods in which the value of bitcoin or bitcoin futures is rising. It is non-diversified.
Long time investors have been a little wary of cryptocurrencies — they've always been quite mysterious, especially with their lack of centralisation. But cryptocurrencies, particularly Bitcoin, are becoming difficult to ignore.
Bitcoin ETFs would allow investors to put cryptocurrency-linked investments into their individual savings accounts or self invested personal pensions, which would mean that they wouldn't have to worry about capital gains tax for the first £20,000 of their investments in each tax year. Additionally, as ETFs have professionals managing them, for a small fee, investors might feel more comfortable knowing their investments are in someone else's hands.
These investments aren't approved by the FCA in the UK yet, so UK investors will need to keep tabs on the status of cryptocurrency ETFs.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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