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The SEC approved the first crypto futures ETFs for the U.S. As the expiration of the contracts in the portfolio approaches, the fund rolls over its investments, selling the expiring contracts and buying contracts for the coming month. The first cryptocurrency ETF, the ProShares Bitcoin Strategy ETF, started trading in October 2021. This is an ETF that tracks bitcoin futures prices. ETFs work. As of January 2024, the fund assigns about 44% of its portfolio to CME bitcoin futures that expire at the end of the current month, and another 54% in CME bitcoin futures expiring the following month. An analysis of the ProShares Bitcoin Strategy ETF, the first crypto ETF on U.S.

Crypto Fund Trading

Yes, you can short a crypto ETF, just as you can with any ETF. ETFs are a retail investor-friendly way to gain exposure to assets that might otherwise be too costly. Brokers want to offer exchange-traded funds that hold cryptocurrency so that average investors can participate in cryptocurrency investing. This strategy, especially in the volatile world of cryptocurrencies, involves elevated risks and potentially unlimited losses, so it’s crucial to understand the dangers before going ahead. Shorting allows you to gain from the decline in an asset’s price. Read our warranty. Liability disclaimer for more info. Bitcoin Jumps to New High Above $66,000 After Landmark U.S. However, these funds tend to come with additional risks and expenses, so it is important to research thoroughly before making an investment decision. The comments, opinions, and analyses expressed on Investopedia are for informational purposes only.

Nevertheless, owning shares in cryptocurrency ETFs has some advantages when accessing the crypto markets. Cryptocurrency ownership also has other hidden costs, such as transaction and network fees, which are all taken care of by the ETF providers, even if you pay indirectly through your fees. The most significant benefit of cryptocurrency ETFs is that they provide exposure to crypto without additional ownership expenses or exposure to risk. Average investors often find it difficult to grasp the scope and function of cryptocurrencies. For example, there are custody charges for cryptocurrencies, and some secure digital wallets charge an annual fee. Cryptocurrency jargon, derived mostly from its technological makeup, is still a roadblock to crypto adoption. These charges can add up quickly.