Here’s what you need to know about the ProShares Bitcoin Futures ETF

The new Bitcoin ETF is a milestone for the crypto industry. In this article you can read what a Bitcoin ETF is and why it is so important for the crypto world.


The ETF starts trading on Tuesday

This week marks a significant milestone in the crypto world as the first US Bitcoin ETF begins trading on Tuesday. The news caused a significant rise in share prices last week. As a result, Bitcoin’s price rose above $60,000 for the first time since May.

The ETF is officially known as the ProShares Bitcoin Strategy ETF and trades under the ticker BITO. It offers a new way to buy Bitcoin in the stock market.


What exactly is the ProShares Bitcoin ETF?

ETF stands for ‘exchange traded fund’. An exchange-traded fund (ETF), also known as an index tracker, is a passively managed mutual fund that is traded on an exchange. The investment objective of an ETF is to track an underlying stock index as closely as possible.

However, the new Bitcoin ETF is different from a “pure” Bitcoin ETF. ProShares does not buy or collect Bitcoins. Rather, it is a bundle of contracts tied to the future price of Bitcoin. As the company makes very clear in its announcement Monday morning:

“BITO, or ProShares Bitcoin Strategy ETF, will invest primarily in Bitcoin futures contracts and not Bitcoin directly.”


How and when do I buy the new Bitcoin ETF?

ETFs trade in the stock market. So if you have an account with a broker just look up the ticker symbol and buy it like you would buy stocks from Microsoft or Tesla or Square.

ProShares officially announced on Monday that BitShares (BITO) will begin trading on Tuesday.


How much does the ETF charge in fees?

The ProShares ETF’s annual fee is 0.95%, according to MarketWatch. So if you buy $1,000 worth of stock, $9.50 per year goes into fees. That’s higher than what most mainstream ETFs charge. This is largely due to the fact that this is a futures ETF, as described above.


Are Other Bitcoin ETFs Coming?

Yes, at least three or four other funds are expected to receive SEC approval and begin trading this week. But it will also be futures ETFs that resemble ProShares’ offerings in price and structure.

A traditional ETF containing Bitcoin — which is available in other countries — is at least months away from regulatory approval in the US. It is still unclear whether the SEC allowing a futures ETF is an indication that it will also allow a “pure” Bitcoin ETF.


Is this a good way to buy Bitcoin?

If you want to gain exposure to Bitcoin through a stock account, this provides a new way to do it. Another roundabout way to gain exposure to Bitcoin would be to buy shares in companies that own Bitcoin, such as MicroStrategy, Square and Tesla. Earlier this month, the SEC approved an ETF of “Bitcoin Revolution companies” that own Bitcoin or are working on Bitcoin products.

However, most BTC investors will tell you that the best way to buy Bitcoin is to just buy BTC tokens. you can do that directly through platforms such as Bitvavo, Coinbase, Binance, Kraken, Gemini, or other exchanges. Doing so usually means you pay less transaction fees than with a Bitcoin ETF. It is true that you have to manage your own cryptos. That is not the case with a Bitcoin ETF. Therefore, this investment vehicle could potentially generate a large influx of new investors.

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