Crypto bulls and investors are rejoicing today at a landmark for the asset class. Investors are finally going to have a chance to gain some exposure to Bitcoin (CCC:BTC-USD) through an exchange-traded fund (ETF). This comes without the hassle and volatility of actually buying the coins oneself. Although it doesn’t live up to the expectations of every crypto fan, it’s a step in the right direction. So, what is the ProShares Bitcoin Strategy ETF (NYSE:BITO)? How might the BITO ETF leave more to be desired?
The BITO ETF is coming to Wall Street this week after a long battle between crypto bulls and the Securities and Exchange Commission (SEC). For years now, the committee has been shooting down any and all attempts to get Bitcoin on Wall Street in any facet. But for the first time ever, we’re seeing approval for a fund that gets Bitcoin into the hands of stock investors … sort of. Let’s take a look and see just what’s going on with the ETF as it goes live.
BITO ETF: A Step in the Right Direction, but Not Exactly What Crypto Bulls Want
- The BITO ETF is the product of ProShares, a provider of specialized ETFs. The company offers up funds centered around markets like oil and biotech, but also leveraged ETFs. Now, it’s expanding into crypto with its newest product.
- Through BITO, investors will have a chance to expose themselves to cryptocurrency without having to actually own the coins themselves.
- However, not all crypto bulls are exactly jumping for joy. The BITO ETF does not really contain any actual Bitcoin. Rather, it deals in Bitcoin futures contracts.
- Just like a stock futures contract, a Bitcoin futures contract allows investors to speculate on future prices.
- This allows investors to see Bitcoin growth patterns realized in their own portfolios, but those investors don’t actually own any Bitcoin.
- Of course, many crypto bulls are irritated by this ETF, as it doesn’t fully realize the desires of the cryptocurrency community. Many are looking for an ETF that actually holds Bitcoin. This is pushing many to campaign in favor of another ETF from the likes of Grayscale, whose Bitcoin Trust is entirely comprised of Bitcoin. Grayscale also says it plans to immediately file to have the trust turned into an ETF when they can be sure of approval.
- Indeed, it’s not a wholly satisfying product for many, but it’s a step in the right direction. The BITO ETF is the first fund of its kind to see approval by the SEC.
- The ETF is listing on the New York Stock Exchange this morning under the “BITO” ticker.
- The fund holds $2o million in assets, and it is debuting on Wall Street at a price of about $40 per share.
- Upon the opening bell, investors are already massively flocking to the fund. Less than one hour into the day’s trading session, investors are seeing nearly 9 million shares of BITO swapping hands.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.