The Valkyrie Bitcoin Strategy ETF, the second Bitcoin futures based fund approved for the US market, start trading Friday, Oct. 22, on the Nasdaq under the symbol BTF.
Shares closed the day at $24.30, down 4.7% from the start, on a day when Bitcoin prices dipped.
The Valkyrie Bitcoin Strategy ETF will own bitcoin futures contracts rather than the actual coin itself. This means it tries to track bitcoin price fluctuations rather than purchasing the actual asset.
Valkyrie Funds CEO Leah Wald told Bloomberg the regulation of futures in the U.S. might provide some greater sense of security to investors over buying the actual asset. The company has applied for approval of an ETF backed by Bitcoin itself, she said, but does not expect that until possibly next year.
How to invest in Valkyrie Bitcoin Strategy ETF
Compare online brokers. To invest in exchange traded funds (ETFs) you will need to sign up to an ETF broker. Our table below can help you choose.
Open and fund your brokerage account. Complete an application with your personal and financial details. Fund your account with a bank transfer, PayPal or debit card.
Search for the Valkyrie Bitcoin Strategy ETF. Find the ETF by name or ticker symbol: N/A. Research it using the prospectus and other information at the sponsor's site to make sure you understand how it works and to confirm it's a solid investment based on your financial goals.
Purchase now or later. Buy today with a market order or use a limit order to delay your purchase until the Valkyrie Bitcoin Strategy ETF reaches your desired price.
Decide on how many to buy. Weigh your budget against a diversified portfolio that can minimize risk through the market's ups and downs.
Check in on your investment. Congratulations, you've invested in the Valkyrie Bitcoin Strategy ETF.
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What we know about the Valkyrie Bitcoin Strategy ETF
Launched on Oct. 22, 2021 by alternative asset management firm Valkyrie and headed by Leah Wald, the Valkyrie Bitcoin Strategy ETF (BTF) is designed to be a simple way for investors to get exposure to Bitcoin (BTC) cryptocurrency in the major US markets.
ETF trading is available at low or no cost through most US brokerages, while many don’t offer direct access to crypto or to international funds.
The fund doesn’t own bitcoin directly. Instead, fund managers trade futures contracts, which are derivatives traded in the futures market that basically bet on the future price of Bitcoin. The ETF’s goal is to replicate the return of Bitcoin, meaning that a 10% move in the price of Bitcoin would mean a 10% move in the price of the ETF.
There’s no guarantee of that, and the fund is too new to judge how close the correlation will be.
The fund charges an annual management fee of 0.95%, relatively high for an ETF. The widely held SPDR S&P 500 ETF (SPY), for example, tracks the S&P 500 and charges 0.09%.
To check out other Bitcoin-related ETFs, check out our bitcoin ETF guide.
Bitcoin ETF or Bitcoin: Which is better for you?
Quick verdict
Bitcoin ETFs better for
Investors who want exposure to Bitcoin without owning the actual asset or setting up a separate account
Frequent traders looking to avoid upfront fees for buying and selling Bitcoin
Investors who'd rather pay an annual fee than trade fees
Investors who don't plan to trade outside US stock-market hours
Investors who see safety in regulatory oversight, since ETFs and futures markets are more regulated in the US than cryptocurrencies
Bitcoin better for
Investors looking for an investment in crypto itself
Investors who want to take full advantage of exposure to Bitcoin's price movements by owning it directly
Long term investors looking to avoid a large annual fee
Investors who plan to trade 24/7 or whenever there's a big price change
Are cryptocurrency ETFs a good investment?
Jeff Yew Founder & CEO at Monochrome Asset Management
For everyday investors, accumulating physical Bitcoin comes with added hurdles of custody and operational risks.
"Bitcoin as a technology is battle-tested, but there is an inherent operator's risk when self-acquiring, holding and managing a bitcoin position even for the most experienced digital native, hence there's a market for those who prefer a safe pair of hands to manage their investment in exchange for a small management fee.
"Investing in a Bitcoin ETF offers investors the benefits of a safe yet low barrier to diversifying their portfolio into the asset class since it's a well understood financial product for most investors."
Who is the Valkyrie Bitcoin Strategy ETF suited for?
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.
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Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
Ron Prichard is managing editor of news production and operations at Pitchbook and a former news editor at Finder, specializing in investments. Ron wrote, edited and built tools at Microsoft News and MSN Money for more than 20 years. He holds a BA in journalism from California State University, Long Beach.
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