XBTF ETF: 9 Things to Know as VanEck’s Bitcoin Futures ETF Starts Trading

The VanEck Bitcoin Strategy ETF (CBOE:XBTF) debuted publicly today after its long-awaited and delayed arrival. The Bitcoin (CCC:BTC-USD) futures exchange-traded fund is just the third of its type to trade on a U.S. exchange. Shares of the XBTF ETF have inched slightly higher to $60.91 today.

Bitcoin tokens on a motherboard representing BTC.

Source: Momentum Fotograh / Shutterstock.com

The release of the XBTF ETF may be a well-needed boost for Bitcoin, as the leading cryptocurrency is trading down 9% the past week. However, XBTF will not invest into Bitcoin or other digital assets directly, as U.S. ETF regulators are still debating the legality of this.

Instead, the fund will invest in Bitcoin futures contracts trading on commodity exchanges that are registered with the Commodity Futures Trading Commission (CFTC).

Should you invest in the XBTF ETF? And what exactly makes it different from the current Bitcoin ETFs on the market, the Valkyrie Bitcoin Strategy ETF (NASDAQ:BTF) and the ProShares Bitcoin Strategy ETF (NYSE:BITO)?

XBTF ETF: What You Need to Know

  1. XBTF will carry an expense ratio of 0.65%, or $65 on an initial investment of $10,000.
  2. This expense ratio is lower than the other two Bitcoin ETFs that are currently trading.
  3. BTF and BITO both carry a 0.95% expense ratio.
  4. XBTF is a C-Corp, which may benefit long-term investors by reducing taxes.
  5. Kyle DaCruz, a director for VanEck, stated: “Cost and tax treatment are two essential considerations for investors, and we have made both front and center in the design of XBTF. Investors deserve lower cost, transparent, regulated bitcoin exposures, and we’re pleased to be leading that charge with the launch of XBTF and all of our ongoing efforts in the bitcoin and digital assets space.”
  6. XBTF is VanEck’s first U.S. ETF product that offers Bitcoin futures exposure.
  7. The fund will be actively managed by VanEck’s head of active trading, Greg Krenzer.
  8. Krenzer has more than two decades of trading experience and joined VanEck in 1994.
  9. State Street will provide services for XBTF, including custody of ETF shares, fund accounting, and order-taking.

On the date of publication, Eddie Pan 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.


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