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Bitcoin ETF (BITO) -- 7 Things to Know Before You Invest

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  • เผยแพร่เมื่อ 18 ส.ค. 2024
  • The ProShares Bitcoin Strategy ETF (BITO) launched today. It gives investors exposure to Bitcoin through futures contracts. It's an expensive fund, weighing in at 95 basis points plus transaction costs. But is it a good fund to invest in?
    In this video, I'll walk through 7 things to consider before making an investment.
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ความคิดเห็น • 39

  • @friedtomato9475
    @friedtomato9475 2 ปีที่แล้ว +8

    Thanks so much for keeping us informed on this timely topic!!

  • @b3rt33
    @b3rt33 2 ปีที่แล้ว +6

    A little too high risk/high cost for me but thanks for clearly spelling out the considerations

  • @Narcissist86
    @Narcissist86 2 ปีที่แล้ว +6

    I think it should be stressed that being a futures-based ETF, there is natural decay, not due to transaction fees, but contango. You briefly touched upon it when mentioning rolling the contracts and sometimes selling low and buying high and vice versa, but Bitcoin futures has been in contango more than backwardation, meaning further dated contracts usually cost more than shorter ones. So the ETF naturally decays over time.
    It needs to be stressed that this is not an ETF for long term investments!

    • @rob_berger
      @rob_berger  2 ปีที่แล้ว +2

      That's a good point, and the prospectus talks about both contango and backwardation.

  • @Dhi-fe5eu
    @Dhi-fe5eu 2 ปีที่แล้ว +1

    Well a month has passed by and I would say you were correct in your prediction.

  • @scott1441
    @scott1441 2 ปีที่แล้ว +7

    Think I will wait for direct BITCOIN ETF , not futures - if expense ratio is as high as this one , forget it . Thanks for sharing Rob

  • @anujgupta9293
    @anujgupta9293 2 ปีที่แล้ว

    Thanks for all the information.

  • @jimmechanikong6924
    @jimmechanikong6924 2 ปีที่แล้ว +5

    High fees and costs make this a no for me. The tax risk and fact this involves futures trading doesn't inspire confidence either.

  • @corner559
    @corner559 2 ปีที่แล้ว +6

    You fail to explain what futures contracts are and how they could potentially behave differently than their underlying securities for people who might not know.

  • @ebrahimhabib477
    @ebrahimhabib477 2 ปีที่แล้ว

    Thanks rob you are a good man

  • @j.p.9189
    @j.p.9189 2 ปีที่แล้ว +3

    Bought one just to play .

  • @tyreliouszukarious2582
    @tyreliouszukarious2582 2 ปีที่แล้ว +1

    I hope ETF investors see to it that just because a security is listed as an ETF does not necessarily make it secure and protected for investment by SEC. As long as the the underlying asset (Bitcoin) exchanged is not regulated, the risks are very high for ETF investors.There is no guarantee that the BITO ETF will consistently and tightly track the price of Bitcoin.

  • @turronenano8574
    @turronenano8574 2 ปีที่แล้ว

    Thank you Rob! I really enjoy your videos. Would like to know what is your take on Webull or Robin hood mobile app?....

  • @joevelasquez2757
    @joevelasquez2757 2 ปีที่แล้ว

    I did see it on M1

  • @thejokert8
    @thejokert8 2 ปีที่แล้ว

    Better off just investing in Coinbase or square stock imo

  • @kcsnew
    @kcsnew 2 ปีที่แล้ว

    Great content Rob and glad you have talked about this hot new ETF BITO today and thanks for sharing the prospectus link as well as not much information available anywhere. I did buy few shares of BITO today as like you mentioned I am not a big believer of the crypto currencies (I did not trade or invest in crypto yet), but as you mentioned since now this ETF is regulated like a cash ETF (though it tracks Bitcoin futures which is ok) so some kind of indirect crypto coverage which is perfectly fine for me some kind of a start, I expect to see some significant bullish trend on this next few days , will see. Cheers

    • @Narcissist86
      @Narcissist86 2 ปีที่แล้ว

      This ETF is meant for short term trading, not long term hold.

  • @dcgirl8765
    @dcgirl8765 2 ปีที่แล้ว +4

    What is a future’s contract?

    • @Narcissist86
      @Narcissist86 2 ปีที่แล้ว +1

      A futures contract is an agreement to buy or sell something - a commodity, a security, etc. - for a given price at a future date.
      A simple example would be, say, a coffee farmer wanting to secure a future transaction before the crops mature. So I planted some seeds, and I expect a harvest in 6 months. I don't want to expose myself to whatever coffee prices will become in 6 months, so I sell a futures contract to someone else, and the contract says that in 6 months I agree to sell X amount of coffee to the other person for Y dollars.
      As the price of coffee fluctuates, that futures contract changes in value. Let's say coffee prices go up higher than that futures contract price - obviously it's worth more now because it gives someone the right to purchase coffee at a lower price, so it will mirror the current price of the commodity somewhat - but it won't mirror exactly, because it's all speculation. If everyone expects a great harvest and market would be flooded with coffee in 6 months, the contract might be worth less even though current coffee prices are high.
      That's futures contracts in a nutshell.

  • @ltmsimply
    @ltmsimply 2 ปีที่แล้ว +7

    I like when you said the best thing money can buy is NOT bitcoin 😏

  • @duartem.1721
    @duartem.1721 2 ปีที่แล้ว

    Trades in Bitcoin futures contracts.. kinda like playing Russian roulette, with two guns..😮

  • @mmactc
    @mmactc 2 ปีที่แล้ว

    I guess I don’t really understand Bitcoin or what it actually does, or what it’s price is backed with other than people having a desire to speculate on its price going up. I’ll pass if I can’t analyze what it actually does and what value it has I cannot justify investing in it.

    • @Narcissist86
      @Narcissist86 2 ปีที่แล้ว +1

      That's ok, lots of people didn't (and still don't) understand the internet either.

    • @rosahansen139
      @rosahansen139 2 ปีที่แล้ว

      @@Narcissist86 you are Right

  • @KennyKimura
    @KennyKimura 2 ปีที่แล้ว +2

    In Canada we have spot BTC ETFs. While I will still continue to hold some BTC in a cold storage, I enjoy those ETFs because I can have them in a tax free account which is a considerable advantage in Canada. I find it's easier with an ETF to set an allocation for my BTC like I do for other assets and rebalance periodically which makes the process more systematic.
    But it also has downsides. I have to pay management fees and I can only trade during stock market hours and as we know, lots can happen off-hours in the crypto world. Also there's always a chance that the custodian could get hacked in which case insurances would only cover for a fraction of the loses.

    • @Narcissist86
      @Narcissist86 2 ปีที่แล้ว +1

      BITO is very different from BTCC. The former suffers from contango decay so is not suitable for long term hold, while the latter is based on physical Bitcoin thus would track closely with spot price.

  • @bingoknows
    @bingoknows 2 ปีที่แล้ว

    Fees are way too high, staying far away from this one

  • @carlbook2051
    @carlbook2051 2 ปีที่แล้ว +1

    I think I'll go to the race track instead of trying this.

  • @alex182618
    @alex182618 2 ปีที่แล้ว +8

    The value of a crypto is much less than air. Air you can breath.

    • @DavidEVogel
      @DavidEVogel 2 ปีที่แล้ว +2

      True. The price of Bitcoin relies on the "greater fool" principle of investing. If I am foolish enough to pay $63000 for a coin, someone more foolish will come along and pay $73000.

    • @Narcissist86
      @Narcissist86 2 ปีที่แล้ว +1

      And I'm sure some people said the exact same thing about the internet.

    • @rob_berger
      @rob_berger  2 ปีที่แล้ว +3

      Perhaps, but the internet is extremely useful. In theory, crypto could be used as a currency, although at present that seems unlikely and bitcoin is certainly not used as a currency. Bitcoin has no meaningful uses at all right now. Will that change? Well, it could in theory become a currency, at which point it would lose it's appeal as an investment. So I'm not sure comparing bitcoin to the internet is meaningful.

    • @Narcissist86
      @Narcissist86 2 ปีที่แล้ว +1

      ​@@rob_berger The comparison to the internet is apt actually. At its infancy the internet was not well understood - you can look at a few chatrooms and scoff at its value. With the benefit of hindsight we can all say that of course the internet is useful. Hell, cloud services is Amazon's top earning division, but it is certainly not something that the average layperson would expect when trying to value the internet 30 years ago. Even 20 years ago, before Netflix, Twitter, Facebook, smart home appliances, etc., few people viewed the internet the same way they do now.
      The user above was ready to write off the entirety of crypto, and it's no different from the uneducated layperson scoffing at internet chatrooms and deriding them as useless. You value something not just based on current utility, but future expected utility as well - that's why you value a stock based on forward P/E, for example. Crypto has tremendous potential for use - for example, smart contracts, which is actually in use right now. Its value as just a currency is but one application.

  • @1mmafrka
    @1mmafrka 2 ปีที่แล้ว +2

    A dinosaur pretending to know about future technology.

    • @TheNORegretShow
      @TheNORegretShow 2 ปีที่แล้ว +4

      Dude you made 2 comments in 10 years. I am willing to bet you are a bot or a troll.

    • @sd0753
      @sd0753 2 ปีที่แล้ว

      None of the crypto ETFs have performed anywhere close to the actual crypto. This ETF is a solution for a problem that doesn't exist. Buy the crypto to want, not this ETF