What once seemed a remote possibility, is now an accelerating reality as two U.S.-listed exchange-traded funds (ETFs) tied to Bitcoin futures debuted on Wall Street last week.
An ETF is an investment vehicle tracking the performance of an asset or group of assets. In the case of a Bitcoin futures ETF, the particular asset is Bitcoin futures contracts traded on Chicago Mercantile Exchange (CME)—currently, the only regulated trading platform in the U.S. to offer this type of a product.
ProShares Bitcoin Strategy Fund—the first U.S.-listed Bitcoin futures ETF—debuted on the New York Stock Exchange (NYSE) on Tuesday, October 19, and was followed by Valkyrie’s Bitcoin Strategy ETF launch on the Nasdaq on Friday, October 22.
While ETFs offer individual investors the benefits of diversification, protection, and liquidity without the need to hold the underlying asset, they all come with an annual management fee—an important aspect any savvy investor takes into consideration.
Both ProShares and Valkyrie funds have a fee of 95 basis points (0.95%), which means that investors pay $9.50 on every $1,000.
ProShares ETF (BITO) drew plenty of attention from investors, with the fund’s trading volume reaching nearly $1 billion on the first day. Valkyrie’s ETF (BTF) saw a much quieter launch—just shy of $80 million, according to Bloomberg.
Things are likely to turn more interesting as early as Monday as VanEck’s Bitcoin futures ETF—the third Bitcoin futures ETF approved by the Securities and Exchange Commission (SEC)—is expected to launch on the NYSE.
VanEck’s Bitcoin Strategy ETF (XBTF) has an expense ratio of 0.65%—significantly lower than what both ProShares and Valkyrie offer, which could mean that investors may prefer a cheaper product.