BITO Bitcoin Futures ETF: Inefficient & very expensive product
SUMMARY: Don't touch, these are inefficient financial instruments and one is better off buying and owning Bitcoin itself.
There is a huge administrative cost to owning an ETF , in addition to the costly futures contract that underlies it.
It has been forecasts that there could be as much as a "11% drag on yield" using a Bitcoin Futures ETF.
The fund portfolio manager needs to paid; the exchanges need to be paid for opening the futures contracts, there is large basis risk as they need to roll the positions forward every quarter. On top of the fact, futures exchanges are closed on the weekend whilst Bitcoin trades 24/7. Huge tracking risk, especially if BTC was to crash after the futures exchange closed on a Friday.
Additional fees include auditors, custodian bank, pay for expensive compliance teams to monitor the positions and report daily to the regulators.
OR!
One can buy the BTC direct and avoid the aforementioned BS. Just as Bitcoin was intended to be owned.
Own BTC directly, means 100% of the gains belong to you!
AND! it is less risky.
There is a huge administrative cost to owning an ETF , in addition to the costly futures contract that underlies it.
It has been forecasts that there could be as much as a "11% drag on yield" using a Bitcoin Futures ETF.
The fund portfolio manager needs to paid; the exchanges need to be paid for opening the futures contracts, there is large basis risk as they need to roll the positions forward every quarter. On top of the fact, futures exchanges are closed on the weekend whilst Bitcoin trades 24/7. Huge tracking risk, especially if BTC was to crash after the futures exchange closed on a Friday.
Additional fees include auditors, custodian bank, pay for expensive compliance teams to monitor the positions and report daily to the regulators.
OR!
One can buy the BTC direct and avoid the aforementioned BS. Just as Bitcoin was intended to be owned.
Own BTC directly, means 100% of the gains belong to you!
AND! it is less risky.
