Bitcoin futures ETF started trading today, but one crypto expert says it’s ‘not something for retail investors to buy’


The first bitcoin-linked exchange-traded fund began trading on Tuesday.

After months of applications filed with the Securities and Exchange Commission by various ETF providers, the ProShares futures-based bitcoin ETF made its market debut on the New York Stock Exchange under the ticker “BITO.”

Following the announcement on Friday that the SEC would allow such an ETF, the price of bitcoin surged past $62,000, but some crypto experts are still skeptical of the SEC’s decision to approve a futures-based bitcoin ETF.

“This is not something for retail investors to buy, in my opinion. There’s plenty of outlets to buy bitcoin directly,” Tyrone Ross, CEO of Onramp Invest, which provides crypto asset management technology for financial advisors, tells CNBC Make It.

“Buying a futures ETF, where the average retail investor does not understand ETFs or futures, which are complicated, is not the best product for retail investors.”

Here’s what to understand before buying a futures-based bitcoin ETF, Ross says.

Understand what you’re buying before you buy

Seasoned investors, such as hedge funds, may profit more

Though Ross says that the introduction of a futures-based bitcoin ETF is good for the overall bitcoin and crypto market, he warns that it may not benefit retail investors individually.

“An ETF is going to drive more of that institutional money in, but they’re going to make a ton of money,” Ross says. “It does help the liquidity of the market, but what about the retail investor? We’re supposed to help those folks, [and that’s] not necessarily what is happening here.”

Other financial experts, along with some in the crypto community, agree with Ross. Some argue that the intermediaries involved in a potential ETF investment, including hedge funds and providers, would benefit more than retail investors, especially if the ETF trades at a premium during bull markets.

“Direct exposure is the best way for a new investor” to get into bitcoin, Ross says. The futures-based bitcoin ETF is “just a product to help [hedge funds and other middlemen] make more money, and folks are going to buy without understanding.”

However, a futures-based bitcoin ETF could be helpful for those unsure of how to safely buy bitcoin, or those who prefer to not have the responsibility of protecting and securing their bitcoin wallet. The price of bitcoin often swings as well, so an investor buying the cryptocurrency directly would have to be able to stomach the volatility.

Nonetheless, it is impossible to predict future performance of any asset.

Just because it’s an ETF doesn’t mean it’s a safer investment

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