ProShares’ Bitcoin ETF Launches Today

October 18, 2021

[Editor’s Note: This is a developing story and will be updated]

The ETF world’s favorite parlor game for years has been speculating on when the SEC would allow bitcoin to underlie an exchange-traded product.

Eight years after the first bitcoin ETF was proposed, the answer is now here.

The ProShares Bitcoin Strategy ETF (BITO) is set to debut on the NYSE Arca today, becoming the first ETF in the U.S. using a cryptocurrency derivative as its underlying asset. It’ll charge a 0.95% expense ratio, the same as the Valkyrie Bitcoin Strategy ETF (BTF) that is currently awaiting clearance to list on the Nasdaq.

BITO and BTF both primarily invest in bitcoin futures, although BITO reserves the right to purchase stakes in foreign ETFs and investment vehicles that hold bitcoin directly.

Both funds also gained clearance to list on their respective exchanges on Friday, which sent bitcoin soaring to a 7% gain during market hours.

The futures-based approach has some structural issues such as roll costs for keeping its contracts on the nearest month, but it’s the preferred method for SEC Chairman Gary Gensler, who hinted at his preference for futures-based bitcoin ETF strategies in August.

Invesco also has a bitcoin futures ETF filing that’s effective as of Monday, but has not submitted any filings to the SEC certifying it is ready for listing on an exchange.

Contact Dan Mika at [email protected], and follow him on Twitter

Find your next ETF

Reset All