Before we dive into the benefits of Bitcoin ETFs, let’s look at how the cryptocurrency is stored. Wallets and exchanges can be hacked, and keys can be stolen. Even offline storage is not completely secure. The main benefit of using an ETF is that you don’t need to keep your own keys, store them securely, or move them from one type of storage to another. Instead, you’ll own shares in the fund, and that means you don’t have to worry about these risks.
BITQ
If you’re curious about the crypto markets, you might be interested in investing in BITQ, a cryptocurrency exchange-traded fund. The fund tracks an index of 30 crypto companies. The index includes companies with market capitalizations of $10 billion or higher, and revenue generated from crypto assets. The fund’s goal is to provide exposure to global cryptocurrency players.
The BITQ fund tracks the Bitwise Crypto Industry Innovators 30 Index, which was developed by Bitwise with input from Moorgate Benchmarks, a benchmark administration and calculation firm in London with deep expertise in the index space. The fund is distributed by SEI Investment Distribution Co., and Exchange Traded Concepts serves as the investment adviser.
BITQ is linked to Bitcoin futures contracts, but does not invest directly in Bitcoin. It invests in cash-settled front-month Bitcoin futures, which have the shortest time to maturity. These contracts are regulated by the Commodity Futures Trading Commission and trade on the Chicago Mercantile Exchange. These contracts are short-term investment vehicles and may involve leverage.
The fund’s prices are determined daily at 4:00 p.m. Eastern Time, and are based on the official closing price of each of its shares. The fund gains exposure through a wholly-owned Cayman Island subsidiary. These prices are then used to calculate the fund’s NAV.
BITO
Bitcoin ETFs are securities that track the price of Bitcoin. BITO, the first Bitcoin ETF, is a futures fund, meaning it doesn’t actually own the currency, but earns its money from fluctuations in its price. Investors can purchase BITO stocks through an online brokerage. After establishing an account, investors must choose how many shares they wish to buy, and then decide how much they want to pay.