BITO was the first Bitcoin-linked ETF in the United States and continues to be one of the most popular among institutional investors. It provides a regulated product that allows investors to gain exposure to Bitcoin-linked returns. The recent filing by BlackRock for a spot Bitcoin ETF on June 15 has only added to this interest, leading to a rise in Bitcoin’s market capitalization to over $30,000.
Interestingly, despite criticism regarding futures roll costs, BITO has tracked Bitcoin’s performance quite closely. As noted by Bloomberg Senior ETF Analyst Eric Balchunas, the ETF has lagged spot by only 1.05% annually. When you consider its fee of 0.95%, this amounts to only 10 basis points of roll, extra costs, which is essentially a rounding error. This is a significant deviation from the over 5% per year that many had predicted.
The recent surge in Bitcoin prices, reaching a recent high of over $31,000 and marking a 14% monthly gain, appears to be spurred by interest from institutional ETF filings. This trend underscores the growing acceptance of Bitcoin as a legitimate investment asset by traditional financial institutions.
However, it’s important to note that while these developments are promising, investing in Bitcoin and other cryptocurrencies still carries significant risk due to their inherent volatility. As always, investors should conduct thorough research and consider their risk tolerance before investing in these assets.
