BITX 2x Bitcoin Strategy ETF

They are subject to unique and substantial risks, and historically, have been subject to significant price volatility. When first introduced in late 2017, there was speculation that Bitcoin futures would not closely track Bitcoin’s daily (spot) price, but Bitcoin futures have proved to be a good proxy for Bitcoin. This performance is not surprising given how futures really work. The popular notion of futures is that they are vehicles for wild speculation, subject to huge unpredictable swings.

Recently I think BITX had started to give out dividend money so they were talking about investing in there too. We were initially looking for stocks, but my mother has recently come across some bitcoin ETFs, mainly BITO and BITX. Bitcoin is a new technological innovation with a limited history. There is no assurance that usage of bitcoin will continue to grow. A contraction in use of bitcoin may result in increased volatility or a reduction in the price of bitcoin, which could adversely impact the value of the Fund.

Summary: Best Bitcoin ETFs

Not knowing how dividends work and all, I felt that this was sketchy and there must be some risk or disadvantage we don’t know about. However, my family brushes off my concern that this feels off. They said that money can’t be made without taking risks and that I’m too pessimistic. They are also thinking about switching to BITX, now that it pays out dividend. They are so excited about it and convinced to keep BITO in their portfolio even if it goes down in the future.

Bitcoin Strategy ETF Overview Volatility Shares Trust / Digital Assets

The Fund has a single day investment objective, and the Fund’s performance for any other period is the result of its return for each day compounded over the period. Short term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. Even if Bitcoin goes on to set new all-time highs, investors that buy BITX and never sell will very likely end up disappointed. On the other hand, BITX offers an aggressive trader a product that’s able to significantly compound Bitcoin gains, without the need for additional capital, or risking more than they invested.

1. Those may involve futures or other ways to gain exposure to bitcoin markets.
2. The worst-case day was March, 12th, 2020, during the worst of the Covid crash.
3. We use your registration information to customize and deliver additional resources via email, including company and fund news.
4. BITI aims to return the inverse of the S&P CME Bitcoin Futures Index for a single day at a time.
5. One factor that makes futures markets popular with some investors is the potential for “leverage”—in other words, the ability to trade with borrowed cash to supercharge your bets.
6. You can read more about our editorial guidelines and the investing methodology for the ratings below.

You must do research before buying a bitcoin ETF, so you fully understand how it is structured. Bitcoin is a relative newcomer to the world of exchange-traded funds. Bitcoin and bitcoin futures are relatively new investments.

1. Until January 11, due to SEC regulations, bitcoin ETFs could not trade bitcoin at its current, or spot price.
2. This obviously comes with elevated risks, but the rewards can be significant.
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4. As a RIC, the Fund will not be subject to U.S. federal income tax on the portion of its net investment income and net capital gain that it distributes to Shareholders, provided that it satisfies certain requirements of the Code.
5. It’s not surprising that Volatility Shares chose to use Bitcoin futures rather than Bitcoin as the underlying security for BITX.

Monday’s daily volatility is 11.6%, a bit higher than the 9% daily average, but well below the predicted 14.7%. Perhaps bitx anka this shortfall is due to lower volatility during the weekends. The table above shows some of the benefits of BITX’s daily resetting ETF structure. For multi-day periods, BITX’s effective leverage is lower than 2X for down-trending periods, and better than 2X, sometimes dramatically, for up-trending periods.

As has often been the case throughout cryptocurrency’s short history, many other cryptocurrencies—often called altcoins, due to them being alternative coins to bitcoin—have risen in value in lockstep with bitcoin’s bull run. You should also consider if you’ll ever transfer any bitcoin from your exchange to a separate hot or cold crypto wallet. With 100% of assets invested directly in bitcoin and a big iShares brand behind it, IBIT is a major player in the space. It is also likely to survive any consolidation that strikes the crowded field of digital asset ETFs in the months and years ahead. Thankfully, now they are fully aware of the risk; they aren’t going to pull out of all of their funds from BITO right away, but they are planning to slowly switch their focus to other stocks and ETFs. Please bear with us as we address this and restore your personalized lists.

What Are Spot Bitcoin ETFs?

After years of anticipation, the Securities and Exchange Commission finally opened the door to 11 spot bitcoin ETFs in 2024. So far, the other 10 are dwarfed by Grayscale Bitcoin Trust. That fund, GBTC, debuted in 2013 as a trust, and is now an ETF.

However, history shows that many ETFs ultimately change to a different strategy or de-list altogether. The iShares Bitcoin Trust ETF is one of the emerging leaders after January’s regulatory moves, thanks to a surge of shareholder money inflow. That is in part because sponsor BlackRock waived a portion of fees until total assets reached $5 billion to attract new investors.

Trading StrategiesAlthough most holders of BITX will likely be short term traders, some will try to capture a future sustained run-up of Bitcoin prices by just buying and holding. However, even if that strategy is successful, any windfall gains will likely fade quickly away if BITX is held for a long time. S&P Global has computed values for BITX’s tracking index, SPBTFDUE, starting from late 2017, when CME Bitcoin futures started trading.

It’s always a good idea to check with a financial advisor before making any investment decision. As with any ETF, investors may want to look at individual investment strategies and holdings as well as metrics such as expense ratio, total assets under management and past performance to determine any ETFs they choose to invest in. As always, keep in mind that past performance is no guarantee of future results.