BITO Bitcoin Strategy ETF (ProShares)

B

betcashrun

SEC filled form on October, 15th:
https://www.sec.gov/Archives/edgar/data/0001174610/000168386321006052/f10028d1.htm

TLTR:
The Fund seeks to provide capital appreciation primarily through managed exposure to bitcoin futures contracts. The Fund does not invest directly in bitcoin.
If the Fund is unable to obtain the desired exposure ... the Fund may invest in equity securities of “bitcoin-related companies.

Not-to-be-missed Risks:
Largely unregulated marketplace: Bitcoin, the Bitcoin Network and the bitcoin trading venues are relatively new and, in most cases, largely unregulated. As a result of this lack of regulation, individuals, or groups may engage in insider trading, fraud or market manipulation with respect to bitcoin.

Declining mining compensation: ... If this compensation is not sufficient to incentivize miners to process transactions, the confirmation process for transactions may slow and the Bitcoin Network may become more vulnerable to malicious actors.

Environmental risk: Bitcoin mining currently requires computing hardware that consumes large amounts of electricity... Public perception of the impact of bitcoin mining on climate change may reduce demand for bitcoin and increase the likelihood of regulation that limits bitcoin mining or restricts energy usage by bitcoin miners (recently in China).
 
I saw a lot people complaining about the fact its not based on the spot price. I believe custody is still an issue for a spot based ETF to be approved.

Anyway the current contango on the BRR contract is only about 80-100 bps so its better than the NG or CL contract based ETPs. Last I checked the Oct -> Nov rollover would be 0.85%. For a security that routinely moves 5-10% that is just noise.
 
For an ETF success I think just means liquidity which it has so it should do well in that sense. I consider Bitcoin, Ethereum, etc. to be commodities so it isn't any different than UNG , USO, BNO, etc.

There are three more coming in fact on Friday the Valkyrie Bitcoin ETF came out. It traded >1 million so that's pretty liquid.

There's another current thread on this subject as well.
 
There are suppose to be 2 more coming after Van Eck, Valkyrie & ProShares:

Invesco Bitcoin Strategy
Galaxy Bitcoin Strategy

So 5 total. The only ones currently trading are the Valkyrie (BTF) & Proshares (BITO). I heard ProShares was working on a Ethereum Futures ETF soon, date unknown.

Currently the liquidity is the best for BITO vs. BTF (6M vs. 450K shares traded) at least for the last 5 days. Makes sense since ProShares is a large outfit and Valkyrie is largely an unknown.

I remember ProShares since it was the original ETF company to launch leveraged ETFs. I made a lot of money just buying and holding the SKF which was -2X Financials during the GFC.
 
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