Should you invest in the new Bitcoin ETF BITO. This video is a review of the new ETF BITO that is a Bitcoin Futures ETF. Should you buy BITO?
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BITO is the first ever Bitcoin ETF that is traded on the stock market. The SEC approved ProShares filing for a Bitcoin ETF & as of October 19th, BITO was traded on the stock market. But should you invest in this new Bitcoin ETF?
It is important to note (and reiterate) that BITO is a Bitcoin futures ETF. This means when you invest into BITO, you are not actually owning any Bitcoin. You are just buying into an ETF that buys into futures contract for the price of Bitcoin. I repeat, when you buy BITO, YOU ARE NOT BUYING ACTUAL BITCOIN!
A futures contract is essentially a bet on where the price of Bitcoin will be in the future. These futures contracts expire each month which means it is pricey. This price is reflected in the expense ratio of this fund, which is 0.95%. That means for every $10,000 you invest, you will pay $95 in fees each year.
Since this is a futures ETF, BITO will track future contracts not the price of Bitcoin. This means that BITO and BTC price changes will not exactly match. You may be paying a premium for BITO as opposed to BTC (on the flip side, you also may be getting a discount on BITO as opposed to BTC).
With that being said, this new Bitcoin ETF is great for crypto all together because it is warming up institutions to crypto!
So why would you want to invest into BITO?
#1 YOU ARE A TRADER
If you are looking to trade with the price of Bitcoin, trading with BITO can be a possibility due to the ability to short the ETF & options with it. This is due to the inherit volatility that Bitcoin has.
#2 IF YOU DON’T WANT TO OPEN ANOTHER ACCOUNT
Whether you don’t want to open another account or “hold” a crypto allocation within a traditional investment account, buying BITO can get you that “sort of” allocation. If you don’t want to deal with the wallets & new accounts, buying BITO could be for you.
#3 DON’T WANT TO WAIT FOR AN ETF THAT LET’S YOU ACTUALLY HOLD BITCOIN
Maybe you want that exposure now or you just want to get your toes wet in Bitcoin, then buying BITO now could be a good idea. It has taken years for the SEC to allow a Bitcoin futures ETF, so no telling how long it will take for the SEC to approve an actual Bitcoin ETF.
I am out of text space, so watch the video to see 3 reasons why you wouldn’t want to buy BITO & my own opinion on the ETF & whether or not I plan to buy it! 🙂
Thanks for watching!!
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1:02 BITO ETF Breakdown
3:31 Should You Invest?
8:07 Make Sure To LIKE & COMMENT!
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