2x Bitcoin Strategy ETF BITX Stock Price, News, Quote & History

An investor in the Fund could potentially lose the full value of their investment within a single day. Instead, the Fund seeks to benefit from increases in the price of Bitcoin Futures Contracts for a single day. All of the funds included in this list are pure-play bitcoin portfolios, offering direct exposure to bitcoin through either spot prices or bitcoin futures. None of the funds included offer indirect exposure to bitcoin by owning stocks of other blockchain-related companies, such as crypto exchanges, bitcoin mining companies and banks that provide solutions for crypto companies. ProShares Bitcoin Strategy ETF was a first-mover in this space and continues to be the leader among bitcoin futures ETFs. Keep in mind, however, that BITO is an actively managed fund linked to bitcoin futures contracts.

The Fund presents different risks than other types of funds. The Fund is not suitable for all investors and should be used only by knowledgeable investors who understand the consequences of seeking daily leveraged (2x) investment results, including the impact of compounding on Fund performance. The Fund is intended to be used as a short-term trading vehicle. Investors in the Fund should actively manage and monitor their investments, as frequently as daily. The Fund is not intended to be used by, and is not appropriate for, investors who do not actively monitor and manage their portfolio. An investor in the Fund could potentially lose the full value of their investment within a single day.

While some futures do have those characteristics, in the five years that bitcoin futures have been trading, they’ve been quite predictable, mostly driven by mundane things like interest rates. This historic performance strongly suggests that futures market makers can cost-effectively hedge their positions with Bitcoin. A bitcoin ETF is an exchange-traded fund that invests primarily in assets related to the original cryptocurrency, bitcoin. ETFs sell shares to investors on the open market and use the proceeds to build a portfolio of assets. The market for the bitcoin futures contracts is still developing and may be subject to periods of illiquidity. Also, in the wake of the SEC’s spot bitcoin ETF approval, applications for other spot crypto ETFs have been submitted to the Securities & Exchange Commission.

1. The table above shows some of the benefits of BITX’s daily resetting ETF structure.
2. I will get into some details later in this post, but unlike some other futures types, the historical daily percentage moves of Bitcoin futures have closely tracked Bitcoin’s moves and this close correspondence is likely to continue.
3. Those financial products derive their value from the potential future prices of an asset—not the current or “spot” price.
4. That meant it lacked the highly liquid, smooth redemption mechanism that ETFs enjoy.
5. Investors are understandably reluctant to pay, say, $1 for 90 cents worth of assets.
6. A “short” ETF is a risky long-term bet amid inflationary pressures that raise many assets’ prices.
7. The ProShares Short Bitcoin ETF has been around since June 2022.

A number of factors may affect the Fund’s ability to achieve a high degree of leveraged (2x) correlation with Bitcoin, and there is no guarantee that the Fund will achieve a high degree of correlation each day compounded over the period. Over a 5-day period bitu and bitx have different returns. Wondering whether this is enough of a difference to avoid wash sales as I plan to sell losing bitx positions and purchase bitu. The author(s) held no positions in the securities discussed in the post at the original time of publication. Widespread adoption of bitcoin as an investment is relatively recent, and some people may be concerned about hacking or losing passwords or private keys needed to access their investment when it’s stored in a secure bitcoin wallet.

1. It remains well over 10 times bigger than the largest of the newcomer spot bitcoin ETFs.
2. However, the approval of spot Ethereum ETFs still appears far off at this point.
3. In the case of an asset like bitcoin, which has been on a tear, ETFs that are set up to profit from the digital currency’s decline have been painfully punished.
4. Get Forbes Advisor’s expert insights on investing in a variety of financial instruments, from stocks and bonds to cryptocurrencies and more.
5. Although large and liquid, however, the elevated fee structure for this bitcoin ETF at present may give some investors cause to shop around.

Are bitcoin ETFs a good investment?

My family don’t know too much about stock market; we aren’t too great at buying low and selling high. So we recently were looking to invest long-term in stocks that give out good monthly dividend so that in the far future, we don’t need to worry about our monthly bills. I will get into some details later in this post, but unlike some other futures types, the historical daily percentage moves of Bitcoin futures have closely tracked Bitcoin’s moves and this close correspondence is likely to continue.

Holdings: BITX

Those financial products derive their value from the potential future prices of an asset—not the current or “spot” price. Jeff Reeves writes about investments, the stock market, exchange-traded funds and retirement topics. A veteran journalist with extensive capital markets experience, Jeff has covered Wall Street and investing since 2008. Beyond Forbes Advisor, his work has appeared in numerous respected finance outlets including CNBC, Fox Business, The Wall Street Journal digital network, Kiplinger, USA Today and CNN Money.

One trend to watch for is that the new spot offerings have caused many shareholders to move some assets bitx anka out of the older funds, into their newer cousins. Funds that fail to maintain a sufficient amount of assets under management will find it hard to stay in business. The only exception we made to these criteria was with the “short” bitcoin fund. It has struggled to hold shareholders’ interest amid the current bull market, but it is positioned to return to favor if bitcoin enters a bear market in the future. With the recent SEC approval of 11 spot bitcoin ETFs, the bitcoin ETF marketplace has become more crowded.

Instead, the Fund seeks to benefit from increases in the price of bitcoin futures contracts for a single day. Until January 11, due to SEC regulations, bitcoin ETFs could not trade bitcoin at its current, or spot price. Rather, fund managers had to own companies and other ETFs that were related to bitcoin or cryptocurrency in general or they owned bitcoin futures contracts. Futures are complex derivatives instruments that should only be traded by experienced investors. The Fund presents different risks from other funds, may only be suitable for knowledgeable investors who understand the consequences of seeking daily (2x) investment results, including the impact of compounding on Fund performance. Investors in the Fund should actively manage and monitor their investments, as frequently as daily.

Choose a Reddit account to continue

It remains well over 10 times bigger than the largest of the newcomer spot bitcoin ETFs. The Fund’s use of Collateral Investments may include obligations issued or guaranteed by the U.S. Government, its agencies and instrumentalities, including bills, notes and bonds issued by the U.S. Treasury, money market funds and corporate debt securities, such as commercial paper. The long-term performance characteristics of a 2X leveraged ETF holding futures on the notoriously volatile Bitcoin challenges our intuition.

DOJ probe pressures, 10-for-1 stock split

The ProShares Short Bitcoin ETF has been around since June 2022. BITI aims to return the inverse of the S&P CME Bitcoin Futures Index for a single day at a time. If and when bitcoin stumbles, this unique ETF may be of interest to investors.