Insightful Principles

EP 69: Bitcoin Futures ETF & The Risks You Need to Know


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Bitcoin Futures ETF is here and there will be many more to come. This podcast describes the risks you need to know when investing in a Bitcoin Futures ETF. BITO debuted on the NYSE exchange as the first bitcoin futures ETF in the U.S on October 19th, 2021. 
I discuss if this ETF is a good opportunity for investors or if it's best to not invest and get exposure to Bitcoin with investing in it directly. 
I also explain the risks associated with investing in a futures contract such as counter-party, costs/fees, as well as price manipulation among institutions holding the future contracts. 
You will learn what a derivative contract is and how a Bitcoin Futures contact exactly works. I detailed the difference between an Bitcoin Spot ETF and a Bitcoin Futures ETF. 
One tracks the price movement's of Bitcoin where the other is directly backed by the derivative of Bitcoin future contracts. 
Other topics discussed was how an Bitcoin Futures ETF can be inaccurately price compared to the spot price of Bitcoin. 
As well as the contango issues with selling cheaper future contracts that are closed to expiration to exchange it for more expensive future contracts that have a longer expiration. Which can be costly to the average investor. 
This is essentially buying low and selling high, which is the complete opposite thing you want to do as an investor.
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Insightful PrinciplesBy Kevin N Jenkins

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