Bitcoin ETF (BITO) — 7 Things to Know Before You Invest



The ProShares Bitcoin Strategy ETF (BITO) launched today. It gives investors exposure to Bitcoin through futures contracts. It’s an expensive fund, weighing in at 95 basis points plus transaction costs. But is it a good fund to invest in?

In this video, I’ll walk through 7 things to consider before making an investment.

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While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I’m the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

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31 thoughts on “Bitcoin ETF (BITO) — 7 Things to Know Before You Invest

  • April 14, 2022 at 2:53 pm
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    I hope ETF investors see to it that just because a security is listed as an ETF does not necessarily make it secure and protected for investment by SEC. As long as the the underlying asset (Bitcoin) exchanged is not regulated, the risks are very high for ETF investors.There is no guarantee that the BITO ETF will consistently and tightly track the price of Bitcoin.

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  • April 14, 2022 at 2:53 pm
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    Well a month has passed by and I would say you were correct in your prediction.

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  • April 14, 2022 at 2:53 pm
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    is there any better crypt currency ETF ?

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  • April 14, 2022 at 2:53 pm
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    Don’t listen to people on YouTube or internet! Invest what ever your heart tell you because it’s your money.

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  • April 14, 2022 at 2:53 pm
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    Trades in Bitcoin futures contracts.. kinda like playing Russian roulette, with two guns..😮

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  • April 14, 2022 at 2:53 pm
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    I think it should be stressed that being a futures-based ETF, there is natural decay, not due to transaction fees, but contango. You briefly touched upon it when mentioning rolling the contracts and sometimes selling low and buying high and vice versa, but Bitcoin futures has been in contango more than backwardation, meaning further dated contracts usually cost more than shorter ones. So the ETF naturally decays over time.

    It needs to be stressed that this is not an ETF for long term investments!

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  • April 14, 2022 at 2:53 pm
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    🌷 investment 400 yrs on….alt Coin and Nft's are the new 'bulb horticulturists' that will obliterate it in a few years !

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  • April 14, 2022 at 2:53 pm
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    Great content Rob and glad you have talked about this hot new ETF BITO today and thanks for sharing the prospectus link as well as not much information available anywhere. I did buy few shares of BITO today as like you mentioned I am not a big believer of the crypto currencies (I did not trade or invest in crypto yet), but as you mentioned since now this ETF is regulated like a cash ETF (though it tracks Bitcoin futures which is ok) so some kind of indirect crypto coverage which is perfectly fine for me some kind of a start, I expect to see some significant bullish trend on this next few days , will see. Cheers

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  • April 14, 2022 at 2:53 pm
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    You fail to explain what futures contracts are and how they could potentially behave differently than their underlying securities for people who might not know.

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  • April 14, 2022 at 2:53 pm
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    Bought one just to play .

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  • April 14, 2022 at 2:53 pm
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    The next global crash will be at the hands of Bitcoin. Remember I said that. Then people will blame the government for not stepping in. Instead of looking in the mirror. Investing in futures of something that is only worth what the next person will pay for it.

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  • April 14, 2022 at 2:53 pm
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    I guess I don’t really understand Bitcoin or what it actually does, or what it’s price is backed with other than people having a desire to speculate on its price going up. I’ll pass if I can’t analyze what it actually does and what value it has I cannot justify investing in it.

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  • April 14, 2022 at 2:53 pm
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    Better off just investing in Coinbase or square stock imo

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  • April 14, 2022 at 2:53 pm
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    Thank you Rob! I really enjoy your videos. Would like to know what is your take on Webull or Robin hood mobile app?….

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  • April 14, 2022 at 2:53 pm
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    I did see it on M1

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  • April 14, 2022 at 2:53 pm
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    I’m just happy to live in a world where a 0.95% ER seems outrageous.

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  • April 14, 2022 at 2:53 pm
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    Fees are way too high, staying far away from this one

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  • April 14, 2022 at 2:53 pm
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    What is a future’s contract?

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  • April 14, 2022 at 2:53 pm
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    A dinosaur pretending to know about future technology.

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  • April 14, 2022 at 2:53 pm
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    A little too high risk/high cost for me but thanks for clearly spelling out the considerations

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  • April 14, 2022 at 2:53 pm
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    Thanks for all the information.

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  • April 14, 2022 at 2:53 pm
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    In Canada we have spot BTC ETFs. While I will still continue to hold some BTC in a cold storage, I enjoy those ETFs because I can have them in a tax free account which is a considerable advantage in Canada. I find it's easier with an ETF to set an allocation for my BTC like I do for other assets and rebalance periodically which makes the process more systematic.

    But it also has downsides. I have to pay management fees and I can only trade during stock market hours and as we know, lots can happen off-hours in the crypto world. Also there's always a chance that the custodian could get hacked in which case insurances would only cover for a fraction of the loses.

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  • April 14, 2022 at 2:53 pm
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    Thanks rob you are a good man

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  • April 14, 2022 at 2:53 pm
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    I think I'll go to the race track instead of trying this.

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  • April 14, 2022 at 2:53 pm
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    High fees and costs make this a no for me. The tax risk and fact this involves futures trading doesn't inspire confidence either.

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  • April 14, 2022 at 2:53 pm
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    Think I will wait for direct BITCOIN ETF , not futures – if expense ratio is as high as this one , forget it . Thanks for sharing Rob

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  • April 14, 2022 at 2:53 pm
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    The value of a crypto is much less than air. Air you can breath.

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  • April 14, 2022 at 2:53 pm
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    Thanks so much for keeping us informed on this timely topic!!

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  • April 14, 2022 at 2:53 pm
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    I like when you said the best thing money can buy is NOT bitcoin 😏

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  • April 14, 2022 at 2:53 pm
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    @Rob Berger

    Well, well. Very timely as I just opened a new more professional crypto account today and have no idea what I'm doing. btw, did you know you can buy crypto at paypal? It's limited in coins, but easy.

    anyway

    I knew BITO was opening today. I had reservations on the fees. I didn't know about the taxes.

    I'm looking for more risky lifts outside of my main portfolio. I may give it a test amount to see how it does. Let you know.

    Very cool. Thanks RobMaster

    Reply

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