The digital token Bitcoin really does have the chance to surpass fiat money (global banking) in just under three decades, according to pioneers of the crypto industry. To learn more about what financial experts suggest considering before buying the futures-based bitcoin ETF, you can read more here.Looking at the promising value of BTC, experts foresee bitcoin replacing fiat money for trading before 2040.Īlthough it is exceedingly impossible to predict the coin’s value thus far in advance, a number of events could significantly alter the structure of the cryptocurrency markets. Whether you invest in the futures-based bitcoin ETF or in cryptocurrency directly, financial experts recommend you only invest what you can afford to lose. "Those that may have been waiting and thought that this was the thing that's going to make it incredibly safe for them, without really doing the due diligence, that's where the concern is," he says. Ross is mainly worried about new investors who have been waiting on the futures-based bitcoin ETF so they could gain exposure to the cryptocurrency without understanding its risks. Just because it's an ETF doesn't mean it's a safer investmentĪlthough a futures-based bitcoin ETF isn't a direct investment in cryptocurrency, it's still risky due to the exposure to bitcoin and intricacies surrounding futures contracts. Nonetheless, it is impossible to predict future performance of any asset. The price of bitcoin often swings as well, so an investor buying the cryptocurrency directly would have to be able to stomach the volatility.
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However, a futures-based bitcoin ETF could be helpful for those unsure of how to safely buy bitcoin, or those who prefer to not have the responsibility of protecting and securing their bitcoin wallet. The futures-based bitcoin ETF is "just a product to help make more money, and folks are going to buy without understanding."
"Direct exposure is the best way for a new investor" to get into bitcoin, Ross says. Some argue that the intermediaries involved in a potential ETF investment, including hedge funds and providers, would benefit more than retail investors, especially if the ETF trades at a premium during bull markets. Other financial experts, along with some in the crypto community, agree with Ross. "It does help the liquidity of the market, but what about the retail investor? We're supposed to help those folks, not necessarily what is happening here." "An ETF is going to drive more of that institutional money in, but they're going to make a ton of money," Ross says. Though Ross says that the introduction of a futures-based bitcoin ETF is good for the overall bitcoin and crypto market, he warns that it may not benefit retail investors individually. Seasoned investors, such as hedge funds, may profit more Ross recommends researching what futures contracts are and understanding how each operates before buying a futures-based ETF. But, overall, "I think the main thing to understand is, you're not buying bitcoin." That's why "the futures market is very obtuse for the average investor," Ross says. There's a whole bunch of nuance," Ross says.įutures market phenomena, like when the manager has to roll out of an expiring contract and into the current contract, will impact this fund's ability to effectively track bitcoin's actual price and could raise trading costs for the fund. That means the price of a futures-based bitcoin ETF could trade at a premium during a bull market or at a discount during a bear market.Īnd with this type of ETF, "You're getting exposure to the futures market. As a result, the prices of the ETF and bitcoin won't match. "I think the main thing to understand is you're not buying actual bitcoin," Ross says.Ī bitcoin futures ETF tracks contracts that speculate on the future price of the digital asset, rather than the current or "spot price" of the cryptocurrency itself.
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