Soreide Law Group comes to you with new information regarding ProShares Bitcoin Strategy ETF. With cryptocurrency becoming an increasingly popular avenue for investors, it may be no surprise that ProShares Bitcoin Strategy ETF is getting quite a buzz. Here’s a breakdown of how this investment works and some of the main things to consider prior to investing.
According to ProShares’ website, the ProShares Bitcoin Strategy ETF (BITO) (CUSIP: 74347G440) is the first United States bitcoin-linked exchange traded fund (ETF). Supposedly, this offers investors a way to get exposure to bitcoin returns without sacrificing liquidity and transparency. Mainly, BITO aims to provide capital appreciation through exposure to bitcoin futures contracts. Basically, a futures contract is a legal agreement to buy or sell a security or asset at a predetermined price at a future time. In other words, you get exposure to cryptocurrency without you having to own the underlying asset.
BITO launched on October 18, 2021, and has an expense ratio of 0.95 percent. As of January 28, 2020, the NAV is $23.76. The fund is mainly invested in treasury bills and CME bitcoin futures. The fund is expected to pay quarterly distributions. ProShares indicates that BITO’s total return is -27.72 as of December 31, 2021.
Notably, if you invest in ProShares Bitcoin Strategy ETF, you could lose your entire investment.
Secondly, investing in BITO does not mean investing directly in Bitcoin. However, it is important to note that Bitcoin is a digital currency that has gone through extreme volatility. Big price swings, including swings caused by seemingly irrational reasons, can cause an investor to sustain drastic losses in BITO. Since cryptocurrencies are newer, it is extremely difficult to predict how they will perform in the future.
Moreover, the lack of regulatory oversight of cryptocurrencies is a major cause of concern. Without adequate regulation, there is a much higher risk of scams and fraud. For this reason, conservative investors with expectations of protecting principal should be incredibly careful with investing in Bitcoin or ETFs that invest in Bitcoin futures contracts.
Before investing, you should educate yourself on all the risks of BITO.
Did your financial advisor make an unsuitable recommendation or misrepresentation about BITO? If so, call Soreide Law Group at (888) 760-6552 and speak with a securities lawyer about a potential recovery of your losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The firm has recovered compensation for many United States investors who incurred losses because of their financial advisors and securities brokers.
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