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What is a bitcoin futures ETF?

A Bitcoin Futures ETF is a type of Exchange Traded Fund that doesn't hold Bitcoin directly. Instead, it invests in Bitcoin futures contracts, which are agreements to buy or sell Bitcoin at a predetermined price on a set future date. This allows investors to speculate on the future price movements of Bitcoin without owning the cryptocurrency itself.

What is futures trading and how does it work?

Futures trading requires lower margins and thus less capital in your trading account. The amount you “save” can be set aside for long-term appreciation, for example in ETFs or mutual funds. With ETFs, you are binding capital that could (perhaps) be of better use elsewhere.

How do futures ETFs work?

Futures are traded, tracked, and monitored on a regulated exchange like the Chicago Board of Trade or New York Mercantile Exchange. Exchange-traded funds can use futures as the assets that make up the fund. Futures ETFs give investors access to the futures market without having to trade on the futures markets.

Are Futures a safe option for bitcoin exchange-traded funds?

SEC Chair Gary Gensler is on the record stating that given the novel character of cryptocurrency, relying on the proven and highly regulated futures market is a much safer approach for Bitcoin exchange-traded funds. Futures are an agreement between two parties to sell a particular asset at a future date.

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