The VanEck Bitcoin Strategy ETF is set to become the third bitcoin-related exchange-traded fund (ETF) listed in the United States following the debut of the ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy fund.
The ETF is due to start trading on the Cboe BZX Exchange on October 23.
How to invest in XBTF ETF
- Compare online brokers. To invest in exchange traded funds (ETFs) listed in the United States, you will need to sign up to an ETF broker with access to US markets. 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 XBTF 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 XBTF 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 XBTF ETF.
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What we know about the XBTF ETF
Launched by ETF provider VanEck, the fund is set to launch just days after the successful debut of the ProShares Bitcoin Strategy ETF. It's set to begin trading on 25 October on the Cboe BZX Exchange under the ticker XBTF.
Like the ProShares Bitcoin Strategy ETF, the VanEck Bitcoin ETF will track the price of bitcoin through futures products, rather than by trading physical coin.
This means investors don't actually own the underlying asset itself but rather are betting on the future value of Bitcoin.
However VanEck is set to undercut its competition by offering a lower management fee of 0.65%. Proshares by comparison is offering a 0.95% expense fee for its bitcoin ETF.
VanEck’s launch follows the highly successful ProShares debut in October - which became the fastest fund to reach US$1 billion in assets under management.
Bitcoin ETF or Bitcoin: Which is better for you?
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?
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 XBTF ETF suited for?
VanEck's ETF allows investors to gain exposure to Bitcoin without having to own the underlying asset itself.
Investors in VanEck instead own future contracts.
This makes the VanEck ETF suitable for investors who want to gain exposure to Bitcoin without having to go through the troubles of owning the underlying asset.
Due to this it is well suited for retail investors who might not understand the complexities around investing in crypto assets.
It is also suited for investors who are familiar with ETF structures and prefer this method of investing.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.