Today marks a real milestone for crypto fans. With the launch of the ProShares Bitcoin Strategy ETF (NYSE:BITO) investors are finally able to invest in Bitcoin (CCC:BTC-USD) futures through an exchange-traded fund. Perhaps more importantly, the debut of the BITO ETF suggests that more Bitcoin ETFs could be on their way.
So what do you need to know? And why are these pending Bitcoin ETFs so important?
As InvestorPlace’s Brenden Rearick notes, this ETF will allow investors to expose their portfolios to Bitcoin in a more traditional way — helping investors avoid direct investments in the cryptocurrency. In this way, BITO could help further push Bitcoin into the mainstream.
Plus, now that ProShares has received the regulatory green light and BITO has hit the New York Stock Exchange, more good news could be on the way. Investors are gearing up for the launch of five other Bitcoin ETFs in the coming months.
What the BITO ETF Means
While investors waited for news of the fund’s approval by the U.S. Securities and Exchange Commission, crypto prices rose. Today saw this trend continue, with both Bitcoin and Ethereum (CCC:ETH-USD) gaining more than 2%.
It’s not hard to see why the prospect of being able to cash in on the Bitcoin boom without the risks that come with holding the crypto itself would be enticing to investors. Plus, for funds that invest in other funds, this is a great chance to get Bitcoin exposure.
However, as Rearick also highlights, not all crypto bulls are excited by this first Bitcoin ETF. That is because instead of tracking the price of the leading cryptocurrency, it tracks Bitcoin futures. This means that it is tracking bets on where the price of BTC will move in future months.
Thankfully, there are already several issuers at work looking to join ProShares in the public markets. Some offer rival Bitcoin futures products, and others promise more direct exposure.
5 Bitcoin ETFs to Know and Watch
Grayscale Investments: A leader in digital currency investments, Grayscale attempted to get on the Bitcoin fund train early. Now, the firm that manages the $40 billion Grayscale Bitcoin Trust (OTCMKTS:GBTC), which accounts for roughly 3.4% of the world’s Bitcoin supply, is filing to convert it into an ETF. Unlike ProShares, Grayscale holds Bitcoin directly, a structure which the SEC has not yet approved for this type of venture. Bloomberg reports that Grayscale CEO Michael Sonnenshein believes that because of the ties between Bitcoin futures and spot pricing, the firm will be able to clear a path forward.
VanEck Bitcoin Strategy ETF: Experts are also highly anticipating approval of a Bitcoin ETF from VanEck, which filed with the SEC in March 2021. Regulators have delayed making a decision on VanEck’s product, but CEO Jan van Eck has stressed that investment communities are still looking for ways to access Bitcoin.
Valkyrie Bitcoin Strategy ETF: January 2021 saw Valkyrie Digital Assets propose an ETF that would trade on the NYSE and have Coinbase (NASDAQ:COIN) as its custodian. Valkyrie expects its Bitcoin EFT to launch soon. When it begins trading, the company has selected a clever symbol — BTFD — which could stand for an (explicit) nod to crypto bulls’ investing strategy.
ARK 21Shares Bitcoin ETF (ARKB): One of most noted crypto bulls began working on her own Bitcoin ETF this summer. Cathie Wood, CEO of Ark Invest, filed with the SEC to launch the Art21Shares Bitcoin ETF in partnership with crypto brokerage platform 21Shares. Previously, she bought into Grayscale’s GBTC by way of a proxy. This proposed ETF would trade under the symbol ARKB and would function primarily to track Bitcoin’s performance. In the filing, Wood’s firm acknowledged that while it understands the volatile nature of the crypto, the rewards outweigh the risks. The firm’s Ark Next Generation Internet ETF (NYSEARCA:ARKW) counts GBTC as a top-1o holding.
Galaxy Bitcoin Strategy ETF: Galaxy Digital filed to launch an ETF tracking Bitcoin futures in August 2021. Like others on this list, the proposal comes after SEC Chair Gary Gensler signaled his support for a Bitcoin futures ETF.
There’s No Future for Invesco’s Bitcoin Futures ETF
Also worth noting is that while many issuers are hoping to see their ETFs follow in BITO’s footsteps, one is taking a pause. Invesco had previously filed to launch a Bitcoin futures ETF, but yesterday announced it would no longer move forward with those plans. Instead, Invesco hopes to refocus its efforts on more-direct Bitcoin ETF.
After a long wait, investors finally have the vehicle they have been seeking in the BITO ETF, and they are about to have several others. The race to be the first to launch may be over, but the ways in which investors have exposure to cryptos are changing quickly.
On the date of publication, Samuel O’Brient 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.