First ’33 Act Bitcoin Futures ETF Debuts

The structure has a number of benefits not found with ’40 Act funds.

Reviewed by: Heather Bell
Edited by: Heather Bell

Today, Hashdex rolled out the first U.S.-listed bitcoin futures ETF to rely on a 1933 Act structure. The Hashdex Bitcoin Futures ETF (DEFI), like competing funds, simply invests in bitcoin futures contracts.  

DEFI comes with an expense ratio of 0.94% and lists on the NYSE Arca.  

While there are multiple differences between ’40 Act and ’33 Act funds, the ones that have a direct effect on investors are the tax implications and the nature of the exposure.  

Gavin Filmore, chief operating officer of Toroso Investments, notes that taxation is “complicated” and “nuanced.” 

“There are too many different path dependencies to make simple statements like ‘it’s always going to be better,’” he added.  

However, an explainer provided by Hashdex notes that ’33 Act funds are taxed at 60% for long-term capital gains and 40% for short-term capital gains, no matter the holding period. Unrealized losses also get pass-through treatment. With a ’40 Act structure, unrealized gains are taxed as ordinary income, while there are no tax credits for losses, according to the document. That all can translate into a benefit for certain investors.  

Additionally, a ’33 Act ETF offers direct exposure to the bitcoin futures market, while a ’40 Act ET relies on an offshore subsidiary to hold its derivatives contracts, and that subsidiary can only represent 25% of the total assets in the fund, meaning funds need to take on leverage to maximize exposure to the performance of the underlying asset. Bitcoin futures, the explainer says, have high margin requirements.  

“The capital efficiency helps maintain a value more in line with bitcoin,” the document says.  

“A ‘physical’ bitcoin product is a better long-term solution for the marketplace. Right now, based on the regulatory guidelines and approvals, that's not an option, so innovators like ourselves and others do what we can with what we are provided,” Filmore said. 

The first bitcoin futures ETF in the U.S., the ProShares Bitcoin Strategy ETF (BITO), launched in October 2021. It currently has $630 million in assets under management after bitcoin prices plunged in 2022, though its assets stood at more than $1 billion within just days of its launch.  


Contact Heather Bell at [email protected] 

Heather Bell is a former managing editor of She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.