The cryptocurrency market reached a significant milestone on October 19, 2021, when the first Bitcoin futures ETF (ticker: BITO) debuted on the NYSE, achieving over $1 billion in trading volume on its first day—the second-highest launch record in history. This marked the SEC's first approval of a cryptocurrency-linked product for mainstream markets. But what exactly are cryptocurrency ETFs, how do their components and fees work, and what risks should investors consider? Let’s dive in.
Cryptocurrency ETF Basics: BITO vs. BTF
Currently, two major cryptocurrency ETFs trade in the U.S.:
| ETF | BITO | BTF |
|---|---|---|
| Full Name | ProShares Bitcoin Strategy ETF | Valkyrie Bitcoin Strategy ETF |
| Type | Futures-based ETF | Futures-based ETF |
| Issuer | ProShares | Valkyrie |
| Launch Date | October 19, 2021 | October 22, 2021 |
| Price (USD) | $40 | $25 |
| Expense Ratio | 0.95% | 0.95% |
| Exchange | NYSE | Nasdaq |
💡 Quick Fact: Cryptocurrencies like Bitcoin use blockchain technology, offering decentralization, scarcity, and anonymity. Bitcoin remains the most traded crypto asset, with prices exceeding $60,000 per coin in 2021 (equivalent to ~NT$2 million).
ETF Components: Futures vs. Spot
BITO and BTF primarily invest in Bitcoin futures contracts (not spot prices), paired with U.S. Treasury bills. Key differences:
| Aspect | Bitcoin Futures | Bitcoin Spot |
|---|---|---|
| Pricing | Based on CME’s Bitcoin Reference Rate (BRR) | Determined by market supply/demand |
| Roll Costs | Required when shifting to longer-dated contracts | None |
| Liquidity | Lower | Higher |
⚠️ Risk Alert: Futures contracts introduce additional volatility and rollover costs absent in spot markets.
How to Buy Cryptocurrency ETFs
Investors can access these ETFs via:
- Brokerage-assisted trading (複委託)
- International brokerage platforms (e.g., Interactive Brokers).
👉 Compare platforms and fees here for optimal choices.
Key Risks of Cryptocurrency ETFs
Liquidity Risk:
- Bitcoin futures markets are less mature, potentially causing order execution delays.
- CME imposes position limits, which may restrict ETF growth.
- Price Gaps:
Futures prices (BRR) update daily, diverging from real-time spot prices. - Premium/Discount Risk:
High demand can inflate ETF market prices beyond net asset values (NAV).
📌 Pro Tip: Always review the ETF’s prospectus for exhaustive risk disclosures.
FAQs
Q: Can I earn dividends from crypto ETFs?
A: No—BITO and BTF are non-dividend-paying ETFs.
Q: Are there cheaper alternatives to BITO/BTF?
A: Direct spot crypto purchases avoid management fees but carry higher security risks.
Q: How do futures-based ETFs track Bitcoin’s price?
A: They approximate performance through futures contracts, not direct holdings.
Q: Is Bitcoin ETF investing suitable for beginners?
A: Only for those comfortable with high volatility and complex derivatives.
Final Thoughts
Cryptocurrency ETFs democratize access to crypto markets but come with layered risks. For cautious investors, dollar-cost averaging and thorough due diligence are essential.
👉 Explore advanced crypto strategies to deepen your portfolio approach.