Bitcoin ETFs: What to Know

After many years, Bitcoin appeared on the New York Stock Exchange. On October 19, the first exchange-traded fund linked to Bitcoin made its debut. This ETF does not directly invest in the digital coin, but it is based on future contracts to the cryptocurrency. The ETF (BITO) is a milestone for crypto. Now everyday investors can expose their portfolios to digital currencies without dealing with digital wallets or online exchanges. If you want to understand more about Bitcoin ETFs, keep reading. 

Are you struggling to find a safe and secure way to buy, sell, and manage your cryptocurrency? At unBanked, we offer plenty of solutions to help you keep track and store these digital coins. We have options from bank accounts to debit cards!

Bitcoin ETFs Definition

An exchange-traded fund, or ETF, is a type of investment that tracks an underlying asset’s price, such as oil, gold, an index, or stocks. As you may have guessed, a Bitcoin ETF is an investment fund that tracks the price of those digital coins. 

Ready To Spend Your Bitcoin, Ethereum, Ripple, Litecoin, and Other Cryptocurrencies?
Within minutes you can register for a Unbanked account, add funds, pass KYC, get a virtual card and make purchases anywhere major credit cards are accepted. Register at no cost to you.
  Register Now

These ETFs are traded on regulated exchanges in the same manner as stocks. An investor can sell or buy a holding in an ETF to other investors on the stock exchange. An ETF is cheaper than a traditional mutual fund. It is considered a passive index-tracking fund. As a result, investors now have access to niche markets and asset classes that were once blocked from the general public.

Related: How to Invest in Crypto (Without Buying Cryptocurrency)

Bitcoin ETFs now combine the best of these two popular investment options. It allows investors to be exposed to Bitcoin with the ease of ETF investing. These funds operate like any other ETF, but they focus on the popular cryptocurrency. 

Many Bitcoin advocates have waited for an ETF based on digital currency. Since October 2021, three funds have now tracked the prices of Bitcoin. However, this could be just the beginning for investors. Business Insider estimates that there could be more than a half dozen new Bitcoin ETFs in the future. After years of rejections from the SEC, the investment tide turned in cryptocurrency’s favor. 

While these are not spot ETFs, those options could hit the market later in the year. Spot ETFs are often considered the “holy grail” for investor acceptance on the exchanges. For now, the SEC has taken the easier route with ETFs based on Bitcoin futures. 

Bitcoin ETFs: What to Know, ASIC-rigs-can-mine-for-Bitcoin, Bitcoin Cryptocurrency Global Crypto , Unbanked, Unbanked Card, Crypto Card, Unbanked Debit Card, Crypto Debit Card, BlockCard

Why Do You Want a Bitcoin ETF?

Any type of investment can be complicated, but investing in crypto can be challenging and volatile. A Bitcoin ETF gives investors access to the world of cryptocurrency. There are several reasons why investors should consider a Bitcoin ETF for their portfolios. Consider these points for your investment strategy. 

First, cryptocurrency can be difficult to secure and store. Over the past decade, you have heard about horror stories where investors could not access their accounts simply because they forgot the password. In some cases, these accounts had millions of dollars in them, leaving the owners without any access. According to a few reports, about 18% of digital currency is stuck in an inaccessible wallet. There are no concerns about properly storing the digital coins with an ETF, making a simplified process for crypto investors

Another plus for a Bitcoin ETF is that it can be traded from an existing brokerage account. Many mainstream crypto exchanges have made it possible to sell and buy digital assets, but ETFs are now available through those more traditional investment avenues. In the past, access to Bitcoin was limited by regulatory complications. Today, their ETFs are traded under strict oversight in mainstream exchanges. 

There is no doubt that investing in Bitcoin carries plenty of risk for a portfolio. ETFs can help to diversify risk. Now investors can find funds that allow traditional commodities, stocks, and other investments. That gives investors more options for risk management while still having access to the crypto market. 

Related: How to Sell Your Cryptocurrencies

Regulation of Bitcoin ETFs

In 2013, the first attempt to create a Bitcoin ETF was made, but it did not succeed. There were concerns about potential fraud and manipulation resulting from the approval. These concerns are still an issue today. For that reason, the SEC has not approved any ETFs that directly hold cryptocurrency. While the markets in the U.S. do not allow trading of these types of crypto ETFs, they are actively traded in Canada and Europe. 

Bitcoin ETFs: What to Know, Consider-other-options-for-your-crypto-investments-1024x576, Bitcoin Cryptocurrency Global Crypto , Unbanked, Unbanked Card, Crypto Card, Unbanked Debit Card, Crypto Debit Card, BlockCard

Other Options To Invest in Cryptocurrency

Cryptocurrency is still new, and any investor should approach these opportunities with a bit of caution. If you are excited about these new Bitcoin ETFs and want to add more to your portfolio, here are a couple of ways to invest. 

Think about investing directly in crypto. Bitcoin is becoming more accepted; even Amazon allows it as a form of payment. However, there are other digital currencies to add to your portfolio. Yes, Bitcoin is the most established and prominent of all the players, but it is not always a safe bet. Take a look at those other coins. You never want to invest more than 10% of the portfolio in these coins. The cryptocurrency market is very volatile, and there is always a chance for a crash. 

If you want a more diversified portfolio, crypto-related investments are another option. With that, you can invest in the future of the money. Coinbase is a major crypt exchange that went public in April 2021. That means you can buy stock in this company. There are also blockchain ETFs. With that, you can invest in the technology behind popular cryptos. Several ETFs give investors more exposure to technology without investing directly in these digital currencies.

Related: Crypto Staking: Easily Grow Your Crypto Holdings

Bitcoin ETFs Are the Future

With these ETFs, you can start to diversify your portfolio. While there are no ETFs that directly hold cryptocurrencies, those options should be coming shortly. For now, Bitcoin ETFs allow investors to invest in the future of digital currency, allowing them to access the world of cryptocurrency

Buy Bitcoin With Your Unbanked Bank Account
Buy Bitcoin and other cryptocurrencies with your crypto friendly bank account from Unbanked. Purchase Bitcoin and other crypto instantly and settle to your crypto wallet.
  Register Now

Do you want to learn more about the investment opportunities involving cryptocurrency? At unBanked, we offer a few free resources to help you invest in alternative currencies!

The Latest

Bitcoin Blockchain

What is the Kimchi Premium? An Investor Guide

Are you a new crypto investor? Have you heard about the kimchi premium and wondered what it was? We’ll look at the kimchi premium, its history, how savvy crypto investors manipulated it, and how a government tries to shut it down. Related: Crypto Terms You Need To Know For Investing Ready To Spend Your Bitcoin,… Read Article

Wolf In The Snow

What is Crypto Winter? Advantages & Disadvantages

If you’ve watched the crypto markets over the past few months, you’ve undoubtedly seen the term crypto winter.  Do you have questions about what a crypto winter is? Are we in one now? We’ll explain a crypto winter, its advantages and disadvantages, and some investment strategies to help you survive them.  Ready To Spend Your… Read Article

a man scrolling on a tablet while sitting at a white wooden table

Double-Spending: How It Applies to Crypto

Cryptocurrency is a market that always carries a little bit of risk. Thanks to this currency being new and dynamic, you have the possibility of losing your investment before you can use it. Double-spending is one of many risk factors for new cryptocurrency buyers. The risk factors for cryptocurrency can be so varied people avoid… Read Article

several stacks of coins with green sprouts next to a wooden house

Initial Public Offering (IPO): Definition & Info

When you get started in your investment career, it’s easy to get overwhelmed by all the options on display. How do you share your investment with others without putting your money at risk? A solid starting point is with the initial public offerings (also known as an IPO). This stock issuance combines the efforts of… Read Article


6.38%

Crypto Rewards
on Spend

You also have access to:

BANK ACCOUNTS
DEBIT CARDS
BUYING, SELLING, & SPENDING CRYPTO


ARE YOU READY TO GET UNBANKED?


Nah, I enjoy high fees...

x