By priyanjana kar
In the last decade, bitcoin has given its investors record-level returns, hence gaining popularity. If you are searching for investment opportunities and willing to take risks, Bitcoin ETFs are the ones for you. As per investment trends in the market, Bitcoin or BTC ETFs are in high demand.
Additionally, bitcoin has risen in popularity among investors because it’s been one of the best-performing assets in the market. Since its launch in 2009, bitcoin, or BTC, has become a global phenomenon.
It is the first cryptocurrency introduced in the market that has crossed the one trillion-dollar mark in investment. As of March 2024, bitcoin has a market capitalization of 1.44 trillion dollars.
Therefore, if you wish to learn more about BTC ETFs keep reading this article. If you are new to investment, then learning ‘What are ETFs?’ is essential before you learn about Bitcoin ETF.
Additionally, if you want to know which are the top crypto ETF in 2024, then you can read this article.
What Is Bitcoin ETFs?
So, what are bitcoin exchange-traded funds that people are curious about investing in presently? ETF or exchange-traded funds are pooled investment securities you can buy and sell, just like individual stocks.
Similarly, Bitcoin ETFs are pooled investments containing Bitcoin-related assets offered on traditional exchanges. You can get hold of these assets with the help of your brokerage and invest in them.
According to Statista Research Department there has been a growth of 3000% in exchange-traded funds since 2003.
Just like you invest in different types of stocks from different businesses, companies, and sectors. Similarly, you can also invest in different types of crypto ETFs or fidelity Bitcoin ETF.
Additionally, you get exposure to cryptocurrencies when you invest in crypto ETF without owning them.
So, when you own bitcoin or BTC ETFs, you get to capitalize on the rising price of bitcoin. Furthermore, you can increase your returns by investing in these ETFs and other ETFs like gold ETF.
How Does BTC ETFs Work?
Bitcoin exchange-traded funds containing exchange-traded products. So, this investment fund holds assets related to Bitcoin. Then, the fund issues securities or shares to the public to invest in. So, even if you cannot purchase Bitcoin, you can still benefit from its rising price.
You can find Bitcoin exchange-traded funds on stock exchanges like any other exchange-traded funds. Additionally, when you invest in exchange-traded funds, you diversify your investment portfolio, which helps you avoid significant losses.
Furthermore, you can purchase and sell bitcoin exchange-traded funds anytime during trading. You can also invest in market-priced ETFs and capitalize on funds containing different bitcoin assets.
Additionally, if you wish to invest in different stocks but don’t have that amount, you can purchase shares of one of these BTC ETFs. This way, you get to capitalize on all the different companies’ stock profits without owning each of their stocks.
Furthermore, you want to learn more about other investment options then read the best investment books in the market.
How To Invest In Bitcoin Exchange-Traded Funds?
If you want to invest in ETFs, you can purchase these exchange-traded funds through your broker. Additionally, you can consult your financial adviser or broker about which BTC ETFs are performing well. Then, you can decide which ETFs you can invest in.
Furthermore, you can find Bitcoin futures ETFs on stock exchanges like Nasdaq and the New York Stock Exchange ARCA. If you wish to short-sell your cryptocurrency, then ProShares Short Bitcoin ETF is a great investment option.
Additionally, you can invest in these crypto ETFs listed below that are performing well in the market.
- VanEck Bitcoin Strategy ETF (XBTF)
- Grayscale Bitcoin Trust (GBTC)
- iShares Bitcoin Trust ETF (IBIT)
- Invesco Galaxy BTC ETF (BTCO)
- Bitwise BTC ETF (BITB)
- ProShares Bitcoin Strategy ETF (BITO)
- Volatile Shares 2x BTC ETF (BITX)
- Global X Blockchain & Bitcoin Strategy ETF (BITS)
- Valkyrie Bitcoin and Ether Strategy ETF (BTF)
Furthermore, you should be aware that most of these ETFs don’t only contain Bitcoin futures but also traditional securities. Take, for example, BITO or ProShare Bitcoin Strategy Fund, which holds future Bitcoin contracts during profitable periods.
Otherwise, their securities consist of companies that have Bitcoin assets and other money-making companies. Bitcoin spot ETF are also a great investment option for you.
Why Should You Invest In Bitcoin Exchange-Traded Funds?
So, why invest in Bitcoin exchange-traded funds when you can invest in other ETFs on the stock exchange? Considering Bitcoin’s returns in the last decade; people have been encouraged to invest in Bitcoin Future ETF.
Additionally, you can purchase these bitcoin exchange-traded funds without requiring excess funds. When you buy a Bitcoin, you must go through security procedures and require excess money.
However, when you purchase Bitcoin ETF, you can eliminate the hassle of huge expenses and security procedures of owning Bitcoin. Furthermore, investing in Bitcoin’s future ETF has several other benefits.
Affordability
Only some have the funds to purchase Bitcoin. Since the rise in the prices of Bitcoin, it has become impossible for ordinary investors to buy one BTC.
Therefore, if you are interested in investing and capitalizing on Bitcoin, the ETF can be a good choice. Additionally, you can gain exposure to Bitcoin when you invest in its ETF and increase your returns.
Among other cryptocurrency exchanges, Bitcoin exchange-traded funds have shown higher risk tolerance. Furthermore, when investing in ETF, you can stay on track with your investment goals, especially within your budget.
Security
If you purchase BTC, you need to safeguard its security keys, especially if you bought BTC through an exchange. You need to secure your security keys in exchange or protect them in your wallet.
However, with the increase in cyber threats worldwide, your chances of getting your wallets or exchanges hacked are higher. So, you always worry about your Bitcoin and its security keys.
You are thinking that securing your BTC’s security keys can be done offline. But that, too, isn’t 100% secure.
On the other hand, when you own ETF, you don’t have to worry about security keys to BTC stores or exchanges. Additionally, you avoid security worries since you don’t own the BTC and only own the shares of the funds holding BTC.
Furthermore, you enjoy the returns on BTC prices while avoiding the hassle of owning it. If you are looking for more secure investment option, then gold and silver stock is a great option for you.
Familiarity
Bitcoin is new in the market; thus, several people need to gain more knowledge about Bitcoin. In this case, forget about investing; understanding BTC can be challenging. On the other hand, you can easily understand exchange-traded funds because of their similarity with individual stocks.
So, if you are interested in dabbling in cryptocurrency but don’t know about it, Bitcoin ETFs are a great investment option. You can focus on something other than understanding Bitcoin mining, blockchain, key storage distributed ledgers, and cryptocurrency.
Instead, you can focus on this you understand which are trading an asset, the asset being the ETF. If you still wish to buy Bitcoin, you must know these facts about Bitcoin.
What is the Future Of Bitcoin Exchange-Traded Funds?
When you invest in bitcoin futures ETFs, you get to invest in futures contracts. But what are Bitcoin futures contracts? Future Bitcoin contracts are standard contracts between two Bitcoin holders that agree to create a fund holding Bitcoins. Then, these fund shares are sold in the market for investors to purchase.
Additionally, you can purchase and sell shares based on the market price they fetch within market hours. You invest in future contracts to avoid the risks related to asset price changes over time.
Furthermore, you need to follow two rules when investing in future BTC ETFs. Firstly, investing in Bitcoin future ETF comes with a legally binding contract that needs to be purchased and sold at a specific time. Secondly, when you make a transaction for future agreements, it is facilitated through future exchanges.
What Famous Investors Have to Say About Investing in Bitcoin exchange-traded funds?
Let’s learn what long-term investors in the market have to say about crypto ETFs.
Bryan Armour, a financial researcher at Morningstar financial firm, says, “It’s going to be a volatile ride. You have to know that going in and ensure you’re okay with that.”
Several other analysts of Bitcoin have said the introduction of crypto ETFs will increase the price of Bitcoin. As per Galaxy Digital, “A Bitcoin ETF would elicit more than $14 billion of investment inflows within its first year on the market and as much as a 74% price increase over that period.”
This prediction indeed became true as you can see in the market price of BTC ETF.
In January 2024, 11 BTC ETFs began trading, this is what SEC Gary Gensler said about them. He said, “While we approved the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse Bitcoin. Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto.”
So, he has offered you and other investors a warning and approval for crypto ETFs.
Conclusion
Now that you know what bitcoin ETFs are, you can invest in your choice of BTC ETFs. You must remember to do market research on the performance of BTC exchange-traded funds so you can invest in them.
The stock market is a tricky place full of losses and gains. However, you can easily overcome risks if you understand the stock market basics. Therefore, you must read the best investment books to learn more about investing opportunities.
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