bitcoin etf news: Bitcoin ETFs: Enter the world of crypto without actually owning it
There are various products on the market for investors that can help them participate in the new time value and volatility.
Exchange Traded Funds (ETFs) are one such product that tracks a specific index, sector, stock, commodity or other asset to bring the best of both worlds.
Bitcoin ETFs were introduced in October 2021 and attracted a large section of investors who did not want the hassle of storing tokens in hot or cold wallets.
Bitcoin ETFs are actively traded on the New York Stock Exchange Acra network. Investors can buy BITO shares through a brokerage house or directly from ProShares. BITO is the largest actively managed Bitcoin ETF to date.
Why Bitcoin ETFs?
This is a passive form of investment, where investors mostly do not have to worry about short-term fluctuations and put their money in a particular asset for the longer term. Even during volatility, they tend to make the most of it by cost averaging.
Mohammed Roshan, CEO and co-founder of GoSats said that passive crypto investing is a good idea and a great way to achieve one’s financial goals, but only if investors stick to strong names that have proven their reliability and value.
Gaurav Dahake, CEO and Founder, Bitbns said that Bitcoin ETFs are stress-free forms of investment as they allow them to remain invested for a longer period and get the most out of their investment.
Who will choose it?
Market experts suggest that new and inexperienced investors, who have low-risk appetite and those who do not want to own crypto directly or cannot track the markets frequently, should enter the crypto space through Bitcoin ETFs.
“ETFs are a great way for institutions and companies to invest in Bitcoin, while regulation around crypto is still hazy,” Roshan said.
In addition, Dahake believes that an investor who is not concerned about short-term market sentiment, or one who is looking for portfolio diversification into high-yield asset classes in the longer term, could look into it, instead of buying Bitcoin outright.
Time horizon and approach?
Crypto investments are long-term and require deep and thorough research. Short-term investments can lead to disappointment and loss of rewards.
An investor delving into Crypto ETF must choose a prominent and legitimate one based on the market value and understand the overall purpose of the token for which it was developed, said Dahake of BitBns.
Limitations
The actual crypto market is a 24×7 phenomenon that lasts 365 days, but ETFs may have restrictions on trading hours. Furthermore, ETFs, which are less risky than actual cryptos, can have a higher free structure. ETFs are only available for selected tokens.
Bitcoin ETFs on exchanges are only open during market hours, Roshan of GoSats highlighted. “Bitcoin is in a very nascent stage and it is not suitable for investors who plan to quit on their knees.”
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
