We can give a brief review about the EFT BITO a Historical Moment, where it approves the first Bitcoin ETF in the United States of Pros hares. And what does this mean? It is a publicly-traded fund (ETF) under the symbol BITO on the New York Stock Exchange (NYSE).
The sponsor of this ETF, that is, the representative of this fund, is a Pros hare who is in charge of many ETFs that are currently listed on the market and have a great reputation.
ETF and Bitcoin Alliance
This ETF has a management cost of 0.9%. Pros hares Bitcoin Strategy ETF (BITO) began trading on October 19, 2021 and is expected to offer an opportunity for investors to gain exposure to the cryptocurrency Bitcoin.
About this fact, investors who have an investment account will be able to buy and sell BITO as if it were a share, eliminating the need to have a crypto wallet and an account on a cryptocurrency exchange.
What is an ETF?
An ETF or exchange-traded fund is a diversified set of assets that are traded on the stock market.
ETFs are a simple, inexpensive, and efficient way to invest. It has many investment advantages such as flexibility, cost efficiency, diversification, transparency, liquidity, and access to multiple markets.
In short, it can be specified that formally and in its structure, it is the same as an investment fund, since buying shares in an ETF means buying a basket of shares or securities, as happens with a traditional investment fund, but the ETF is listed in the Stock Market, in the same way as a share. The BITO ETF is a Bitcoin future ETF.
You must be wondering how ETFs work? Its operation has certain similarities with these two financial products.
The ETF providers are the ones in charge of setting up and guarding all the underlying assets that make up its fund, these being the sole owners of the assets deposited there.
Unlike buying and selling cryptocurrencies on an exchange, ETFs are only traded on markets such as the NYSE or the Toronto Stock Exchange. In other words, these funds operate mainly in markets regulated and supervised by financial authorities.
Do you know what Bitcoin futures ETF are? Bitcoin futures ETFs are those that are invested in contracts that are used to speculate on the future prices of the cryptocurrency.
They can be bought and sold as a share and do not require buyers to have an account with a cryptocurrency exchange or to own a wallet.
One of the positive aspects of the BITO ETF is that we have an instrument, an exchange-traded fund (ETF), that is linked to a cryptocurrency and that is listed on a regulated market.
Another would be simplicity, that is, investors who have an investment account will be able to buy and sell BITO as if it were a share.
It is important to emphasize that the two bitcoin ETFs are going to start trading in futures and not in cash.
So be careful, a manual sell the news is very likely, and we will see the 52K again in a very short time. Be careful with the FOMO and be clear about the strategies when investing in this bullish asset.
Advantages of a Bitcoin ETF for inexperienced users
- Investing in a Bitcoin ETF provides leverage on the price of the cryptocurrency without the investor having to learn how it works.
- Diversification of wallets the fund of an ETF can contain more than one asset. Investors will not have to buy each asset individually to diversify their portfolio but maybe protecting their earnings with bonds, commodities, and company stocks. This helps mitigate the losses that the cryptocurrency market can generate due to its constant volatility.
- Greater regulatory and fiscal stability Because ETFs operate in regulated markets; there is greater legal coverage and understanding of how the profits generated with this instrument are declared. Likewise, these products are accepted by most tax havens and pension funds, a benefit that cryptocurrencies do not have in all countries.
Conclusion
The strategic alliances between cryptocurrencies and the various electronic tools have turned the digital economy upside down, increasingly diversifying the number of profit-generating assets. Investing with fundamentals is not such a crazy idea. Also, if you are interested in investing in these coins and stablecoins, then investing and knowing stablecoins should be done first.