The Proshares Bitcoin Strategy ETF offers investors the opportunity to invest via a brokerage account in Bitcoin futures contracts, thereby increasing the return of Bitcoin. Because ETF-backed tokens are listed on the Nasdaq, investors can trade them like shares without owning bitcoin. For most fund managers, ProShares ETFs offer an easy way to participate in a market index through an Exchange Traded Fund (ETF).
Proshares offers one of the largest series of ETFs, with its subsidiaries managing more than $65 billion in assets. ProShares ETFs contain more than 140 different products, including leveraged inverse ETFs and one of its most popular products, the Ultra S & P 500, which aims to double the return of S & P 500. Proshares ETF providers are known for their leveraged and inverted funds.
ProShares now offers over a dozen Exchange Traded Funds (ETFs) and products specifically designed for speculative investment strategies. The company focuses on equities, fixed income and alternatives to volatility by offering leveraged ETFs and inverse funds. Proshares offers one of the largest ETFs and has more than $31 billion in assets.
Combined with low fees and tax efficiency, index ETFs can build greater long-term savings than comparable investment funds. ProShares ETFs are not diversified and carry certain risks, including imperfect benchmark correlations, market price volatility and diminished performance. Shares in an ETF can be bought and sold at market prices, not NAVs, and cannot be redeemed by the fund.
The very existence of the Proshares ETF has sparked speculation that an actual Bitcoin ETF could be approved based on the spot price. Investors and analysts believe the ETF will do more in the coming years to draw more attention and interest to bitcoin and crypto.
Bitcoin futures will be overseen for at least four years by the Commodity Futures Trading Commission, and ETFs will be regulated by the SEC to provide investor protection, said SEC Chairman Gary Gensler Tuesday. Large investment firms have driven up the price of bitcoin futures in anticipation of a Bitcoin ETF being approved.
According to Bloomberg, an ETF focused on bitcoin futures closed $1 billion in trading on its first day, which is the highest traded new ETF on record. ETF provider ProShares said on Monday that its Bitcoin futures fund would go into trading on Tuesday. The fund’s price rose to $44.94 at the close of trading, a 49% increase from an initial net asset value of 40%.
The crypto industry has been tracking Bitcoin-related ETFs for many years. Asset managers began to market bitcoin ETFs in 2017, but all their proposals were rejected by the Securities and Exchange Commission, which claimed that none of them were capable of demonstrating the market’s resilience to manipulation. Since then, a number of firms have sought approval for a genuine Bitcoin ETF that would hold the currency.
Proshares managers ring the opening bell on the NYSE, where the ETF is traded. ProShares subsidiary Profund launched the first bitcoin-linked investment fund in the US in July this year. Proshares has been at the forefront of ETF revolution since 2006. Profund Group, the world’s largest manager of short-leveraged funds, launched Proshares in 2006 and launched its first wave of leveraged ETFs in June of that year.
Bitcoin for the first time since April, ahead of the launch of the first exchange-traded fund to track the digital currency, reached the $63,000 mark on Tuesday. ProShares made history on Tuesday when it became the first bitcoin futures ETF to debut under the ticker symbol BITO on the New York Stock Exchange. Today is a big day for Bitcoin and Blockchain investors and enthusiasts with the presentation of the Proshares Bitcoin Strategy ETF (ticker symbol: BITO) after its release by SEC on Friday.
The Bitcoin ETF, traded under the symbol ARKA, is a futures-based ETF developed in partnership with 21Shares. Bito Proshares Bitcoin Strategy ETF invests in bitcoin futures contracts, but not directly in bitcoin.
This means that investors in the first US Bitcoin-linked exchange-traded fund can expect to differ in price and performance of the fund’s shares from the Bitcoin price. This is not ideal for existing investors, as many of them have a long view of cryptocurrencies and hope the ETF will track the physical bitcoins that investors buy and hold.
Bitcoin futures are subject to margin requirements, collateral and other constraints that could prevent the ETF from achieving its objectives. Investors who buy futures into the ETF do not receive the same investment as a traditional ETF that holds the underlying asset. Futures in ETFs often lag the value of bitcoin, a phenomenon known as contango.
Due to the costs involved in the rolling over of futures contracts and management of the ETF structure, BitO does not offer the same long-term price performance as holding bitcoin. The Bitcoin ETF does not hold Bitcoin, as a typical ETF holds the underlying asset. The total fund flow consists of capital inflows into the ETF minus capital outflows from the ETF over a period of time.
The following table contains certain tax information for ETFs listed on US exchanges and tracked by the ETF database, including the applicable short and long-term capital gains rates and tax forms reporting gains and losses of the ETFs. Links in the table lead you to various analytical resources relevant to the ETF, including X-ray stocks, official fact sheets and objective analyst reports.