How to Choose a Bitcoin ETF
If you’re considering making the move to invest in Bitcoin, you should know that it’s still a relatively new investment with little history to base your decisions on. It’s always best to invest only what you’re willing to lose and not at the expense of other financial goals. Bitcoin is a volatile currency, and if you’re unsure about the market, you should consult a financial advisor before investing. The following are some key factors to consider when choosing a Bitcoin exchange-traded fund.
Bitwise Crypto Industry Innovators ETF
The Bitwise Crypto Industry Innovators ETF is a market-based exchange-traded fund (ETF) that tracks the performance of 30 pure-play companies within the crypto space. Companies in this ETF have at least $100 million in liquid crypto assets and generate 75% of their net assets and revenue from the cryptocurrency markets. Companies that make money from crypto assets include companies that provide financial and banking services, mining solutions, technology, and analytics.
The index is backed by leading asset management executives and institutional investors. The fund has been featured in publications such as Institutional Investor, Bloomberg, CNBC, and The Wall Street Journal. But before investing in a crypto ETF, you should learn more about this fund and the companies it tracks. This article will provide you with a more comprehensive understanding of the Bitwise Crypto Industry Innovators ETF. Here are some details:
The Bitwise Crypto Industry Innovators ETF tracks the performance of the Bitwise Index. With over $1 billion in assets under management, it offers investors exposure to crypto-focused companies. The index is administered by Bitwise Asset Management, the world’s largest crypto-asset index fund manager. The fund is distributed by SEI Investments Distribution Co. In addition, Bitwise is the first crypto equities ETF and is backed by Morningstar.
The BITO bitcoin exchange-traded fund offers investors exposure to the returns of Bitcoin without actually holding the asset. It does not own the asset itself, but rather invests in cash-settled front-month bitcoin futures contracts traded on commodity exchanges registered with the CFTC. BITO’s underlying metric is the CME Group and Crypto Facilities Bitcoin Reference Rate, which aggregates bitcoin trading activity across the world’s major spot trading venues for a one-hour window. It is calculated as the arithmetic mean of twelve VWMs (volume-weighted median) of trading activity over a period of one hour.
BITO has several features that make it an excellent investment for investors who don’t want to own the asset directly. For example, the fund holds Bitcoin futures contracts, which are standardized agreements between two parties that allow investors to speculate on its price at a future date. The fund can hold only a limited number of these contracts, but that limit limits its volatility. As a result, it offers diversification benefits and limited risk.
While the bitcoin price may rise or fall on its own, the BITO can be shorted and thus can put downward pressure on the spot market. Because the BITO bitcoin ETF has a premium over the spot price, it is a potential arbitrage opportunity. Regardless of its negative aspects, the BITO bitcoin ETF has received positive reviews on its first day of trading, with nearly $1 billion worth of volume.
Valkyrie Bitcoin Strategy
The Chief Investment Officer of Valkyrie is Steven McClurg. He has considerable experience in finance and has been a founding partner at Theseus Capital. Before founding Valkyrie, McClurg worked for Galaxy Digital as a Managing Director, building out its asset management business. Before that, he was a portfolio manager at Guggenheim Partners, where he developed the firm’s fixed income portfolio construction strategy. His experience in technology companies enables him to provide an informed perspective on the market. He holds an MBA and MS from Pepperdine University, and also serves as an adjunct professor at the university.
Despite its lack of direct exposure to bitcoin, the ETF will seek to gain exposure to the rising digital asset through its diversified portfolio of treasuries, corporate bonds, cash, and more. Unlike the Bitcoin Spot ETF, the Valkyrie Bitcoin Strategy ETF will not lose money in the event that the price of bitcoin falls sharply. This will give it a distinct advantage over its rival, the Bitcoin-specific SPDR Fund (BTSX).
Moreover, the company manages the funds through its affiliates. These firms provide asset management, research, and other services. The firm’s affiliates work across various financial platforms to give investors exposure to the emerging digital asset class through conventional financial vehicles. Their affiliates’ backgrounds include Guggenheim Partners, UBS, the Chicago Board of Trade, and the Mercantile Exchange. This means that the Valkyrie team can provide you with the highest-quality advice.