The incredible rise of cryptocurrency, especially the interest in Bitcoin, is captivating. The cryptocurrency market has grown by leaps and bounds when most other investment destinations struggled. That sentiment gradually changed and investors showed the nerve to park their money in investment tools. This allowed cryptocurrency to flourish. The next step in this comes in the form of cryptocurrency-linked exchange-traded funds, or ETFs, a type of security that tracks an index, sector, or commodity, but can be bought or sold on an exchange in the same way a normal stock can be. .
In a cryptocurrency milestone, the first-ever Bitcoin ETF in the US began trading on the New York Stock Exchange (NYSE) in October. The ProShares Bitcoin Strategy ETF is called BITO.
Here are a few things you should know about BITO:
– The bitcoin-linked ETF began trading on October 19 this year on the NYSE ARCA exchange.
– Investors can buy shares of BITO directly through the fund company or through a brokerage.
– Since ETFs are investment securities traded on an exchange, such as stocks, the BITO ETF provides easy, indirect access to this cryptocurrency for retail investors. To track the price of Bitcoin, BITO buys Bitcoin futures, which are then securitized in a tradable ETF.
– But investors should expect Bitcoin futures price and performance to change relative to Bitcoin’s current “spot” price.
– BITO is the first Bitcoin ETF listed on a US exchange, but ETFs were previously launched in Canada and Europe.
– To trade a Bitcoin ETF, investors must first choose a financial institution through which they wish to trade. Then they have to open a trading account and add funds to it.
– An important aspect of futures trading is thorough research into their options. Finally, place the trade.