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Views 10k2024.04.10

Don't Want to Miss Crypto Opportunities to Follow These Bitcoin ETFs

Bitcoin price surged on Wednesday to reach $59,000, reaching levels not seen since late 2021. The rise of this top cryptocurrency continues, and it seems that Bitcoin investment is very explosive at the moment, for those who cannot directly engage in Bitcoin trading with digital wallets, who are participating in Bitcoin What about the opportunity for a banquet?

While the way Bitcoin was bought directly in the past allowed investors to gain full control and ownership of real cryptocurrency assets, there were also some obvious drawbacks to this method. such as:

Exchange accounts may face security risks such as theft or loss of private keys, threats of exchange hacking, etc.
Managing Bitcoin requires some technical knowledge, which can make it difficult for investors who are not familiar with the operation of digital currencies

The above two points are usually the points of doubt when trading Bitcoin, so below the pain points, there is also a Bitcoin ETF as an alternative.

Simply put, a Bitcoin ETF is an exchange-traded fund that allows investors to participate in the Bitcoin market through traditional stock exchanges without having to buy and hold Bitcoin directly, that is, buying a Bitcoin ETF can be equivalent to holding a portion of a digital currency.

This investment tool provides convenience for investors who want to invest in Bitcoin but are also concerned about the complexity and security of cryptocurrency exchanges. At the same time, holding a Bitcoin ETF is cheaper in cost than directly holding Bitcoin (rates are typically less than 0.3%), is easier to trade through a stock account, is more secure in security, and can be held in a retirement account with potentially reduced tax burden.

So which Bitcoin ETFs can be traded on the market right now?

The 11 Bitcoin spot ETFs approved for the first time by the US Securities Exchange (SEC) have proved explosive since their listing and are worth watching as a spot ETF with lower commission rates. In addition, markets such as Canada had relevant spot ETFs available for trading early on, and many Bitcoin futures ETFs entered the market earlier.

11只比特幣現貨ETF表現火爆 | 資料來源：富途牛牛 — 11Only Bitcoin Futures ETF Explodes | Data Source: Futubull

1. What are the Bitcoin spot ETFs?

1. For example, the first two trading volumes of a spot ETF listed at the beginning of the year are:

（1）$iShares Bitcoin Trust(IBIT.US)$is a Bitcoin exchange-traded fund that allows investors to participate indirectly in the Bitcoin market by purchasing fund shares. IBIT IS DIRECTLY LINKED TO BITCOIN PRICES, PROVIDING INVESTORS WITH A CONVENIENT WAY TO ACCESS BITCOIN ASSETS WITHOUT HAVING TO DIRECTLY HOLD OR MANAGE CRYPTOCURRENCIES.

ADVANTAGE: STRONG COMPLIANCE, INVESTORS CAN BUY AND SELL IBIT SHARES AT ANY TIME DURING NORMAL TRADING PERIODS, WITH RELATIVELY HIGH LIQUIDITY.
Disadvantages: As a Bitcoin-related financial product, IBIT's performance may be affected by tracking errors, i.e. the fund's net worth performance may not be fully in sync with the Bitcoin spot market price.

（2）$Grayscale Bitcoin Trust(GBTC.US)$is a closed-end investment tool that allows investors to hold Bitcoin indirectly. IT IS ISSUED AND MANAGED BY GRAYSCALE INVESTMENT COMPANIES, BUT IS NOT AN EXCHANGE-TRADED FUND (ETF). GBTC's net asset value is based on the value of Bitcoin it holds.

ADVANTAGES: SIMILAR TO IBIT, GBTC IS A GOOD CHOICE FOR INSTITUTIONS AND INDIVIDUAL INVESTORS LOOKING FOR REGULATORY CHANNELS TO INVEST IN BITCOIN AND HIGH LIQUIDITY.
Disadvantages: Compared to other investment products, GBTC has relatively high management fees, which can erode investment returns.

2. What other Bitcoin spot ETFs are there?

（1）$PURPOSE BITCOIN ETF ETF UNIT(BTCC.CA)$FEATURES: AS THE WORLD'S FIRST APPROVED BITCOIN SPOT ETF, BTCC DIRECTLY HOLDS ACTUAL BITCOIN AND MORE CLOSELY TRACKS BITCOIN'S MARKET PRICE.

（2）$BITCOIN ETF UNIT CAD(EBIT.CA)$Features: Similar to BTCC, EBIT holds Bitcoin directly, providing investors with a return on investment that is highly correlated to the price of Bitcoin.

（3）$3IQ BITCOIN ETF UNIT (CAD)(BTCQ.CA)$Features: Launched by 3iQ in partnership with CoinShares, BTCQ directly holds and stores Bitcoin, providing investors with Bitcoin market exposure while relying on professional institutions to manage and store Bitcoin, alleviating security concerns for investors directly holding Bitcoin.

（4）$CI GALAXY BITCOIN ETF CAD UNHEDGED ETF UNITS(BTCX.B.CA)$Features: BTCX also holds Bitcoin directly, providing investors with a convenient way to invest Bitcoin directly in the Canadian market. The ETF provides a direct investment channel in the Bitcoin live market with some transparency and regulatory protection. At the same time, global investors may be restricted by regional investment rules as it is currently listed only in Canada.

Second, in addition to spot ETFs, there are Bitcoin futures ETFs:

1、$ProShares Bitcoin Strategy ETF(BITO.US)$FEATURES: AS THE FIRST LISTED BITCOIN FUTURES ETF IN THE UNITED STATES, BITO TRACKS THE PERFORMANCE OF BITCOIN FUTURES CONTRACTS RATHER THAN HOLDING BITCOIN DIRECTLY. Through this ETF, investors can participate indirectly in Bitcoin market fluctuations without the need to buy or store the cryptocurrency directly.

Advantage: For traditional investors, the ETF provides a more familiar, regulatory compliant investment channel; it can be traded at any time during trading periods, with high liquidity.
Disadvantages: Due to tracking futures contracts, there may be rollover costs (exhibition fees) and spread risk (the difference between futures prices and spot prices) and may not fully reflect the performance of the Bitcoin spot market.

ProShares比特幣策略ETF(BITO.US) — ProShares Bitcoin Strategy ETF (BITO.US)

2、$Valkyrie Bitcoin and Ether Strategy ETF(BTF.US)$Features: Similar to BITO, BTF similarly invests in Bitcoin futures contracts, providing investors with a compliant Bitcoin openness.

Advantages: It also has regulatory compliance, suitable for investors who want exposure to Bitcoin but are unwilling to take on Bitcoin risk directly.
Disadvantages: Also face issues such as futures contract exhibition fees and spread risk.

Third, the difference between Bitcoin Spot ETF and Futures ETF

A digital currency spot ETF (such as a Bitcoin Spot ETF) is like a basket with real digital currencies directly inside, such as Bitcoin itself, whose value fluctuates closely with the Bitcoin market price.

Whereas a digital currency futures ETF is more like a basket with “commit to buy digital currency contracts”, which contract to buy or sell Bitcoin at a certain price at a certain time in the future. Its value is influenced not only by the price of bitcoin, but also by additional factors such as the time value of futures contracts, exhibition costs, etc. Veins.

Therefore, spot ETFs directly reflect the current price, futures ETFs may deviate from the current price, while futures ETFs also have loss issues such as changeover months.

If you don't want to bear monthly losses, spot ETFs will have a better value for investment.

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