Spot Bitcoin ETFs and Funds

Investors can gain exposure to Bitcoin via Bitcoin industry equity... Investors can gain exposure to Bitcoin via Bitcoin industry equity funds, Bitcoin futures funds, and Bitcoin spot funds. Bitcoin spot funds invest in and hold Bitcoin itself, offering investors a direct exposure to Bitcoin. With these funds, investors will not own the bitcoin themselves, but instead own a share of the fund representing a certain amount of Bitcoin. These funds differ from Bitcoin futures funds, which own derivative contracts tied to the price of Bitcoin. They also differ from Bitcoin industry equity funds, which offer indirect exposure to the wider Bitcoin universe by investing in companies either tied to the Bitcoin ecosystem or benefiting from the cryptocurrency industry. After years of opposition from the U.S. Securities and Exchange Commission (SEC), in January 2024 the regulator changed its stance following some court decisions and gave the green light for a number of Bitcoin spot ETFs to start trading. These include ETFs that were allowed to change their strategy (aka from futures to spot) and structure (aka from Trust to ETF). Bitcoin spot funds will offer both retail and institutional investors a pure play on Bitcoin, as the units are backed by Bitcoin itself. The belief among Bitcoin bulls is that by regulating these funds, more investors can have confidence in the underlying fundamentals of Bitcoin, while hoping to get low cost exposure via the ETF structure. These funds are appropriate for investors looking to gain a direct exposure to Bitcoin without the hassle of having to set up an account with a cryptocurrency exchange. However, investors must be aware that the price of these funds can fluctuate wildly as they are directly correlated to the price of Bitcoin. The volatile nature along with a short history of Bitcoin makes these funds suited for only aggressive investors. Last Updated: 05/08/2024 View more View less

Investors can gain exposure to Bitcoin via Bitcoin industry equity funds, Bitcoin futures funds, and Bitcoin spot funds. Bitcoin spot funds invest in and hold Bitcoin itself, offering investors... Investors can gain exposure to Bitcoin via Bitcoin industry equity funds, Bitcoin futures funds, and Bitcoin spot funds. Bitcoin spot funds invest in and hold Bitcoin itself, offering investors a direct exposure to Bitcoin. With these funds, investors will not own the bitcoin themselves, but instead own a share of the fund representing a certain amount of Bitcoin. These funds differ from Bitcoin futures funds, which own derivative contracts tied to the price of Bitcoin. They also differ from Bitcoin industry equity funds, which offer indirect exposure to the wider Bitcoin universe by investing in companies either tied to the Bitcoin ecosystem or benefiting from the cryptocurrency industry. After years of opposition from the U.S. Securities and Exchange Commission (SEC), in January 2024 the regulator changed its stance following some court decisions and gave the green light for a number of Bitcoin spot ETFs to start trading. These include ETFs that were allowed to change their strategy (aka from futures to spot) and structure (aka from Trust to ETF). Bitcoin spot funds will offer both retail and institutional investors a pure play on Bitcoin, as the units are backed by Bitcoin itself. The belief among Bitcoin bulls is that by regulating these funds, more investors can have confidence in the underlying fundamentals of Bitcoin, while hoping to get low cost exposure via the ETF structure. These funds are appropriate for investors looking to gain a direct exposure to Bitcoin without the hassle of having to set up an account with a cryptocurrency exchange. However, investors must be aware that the price of these funds can fluctuate wildly as they are directly correlated to the price of Bitcoin. The volatile nature along with a short history of Bitcoin makes these funds suited for only aggressive investors. Last Updated: 05/08/2024 View more View less