ProShares is getting ready to launch a Bitcoin ETF in 2021. It will be the first ETF in the history of cryptocurrency. However, there have been no official announcements on the company’s website yet.
ProShares was founded in 2006. It offers investment in futures products. The company positions itself as the leader in such strategies as dividend growth, interest rate hedged bonds, and geared (leveraged and inverse) investing.
ProShares offers a wide range of securities in such categories as IT, oil trade, finances, business, and even a pet care ETF.
On Friday, a representative of the fund filed an amended application for a futures-based Bitcoin ETF with the Securities and Exchange Commission (SEC). The application has all the features of a regulatory filing that is likely to launch soon, Todd Rosenbluth, chief of ETF and mutual fund research at CFRA, said during a telephone interview.
According to Mr. Rosenbluth, the filing might indicate that the fund will launch on Monday or Tuesday. The new exchange-traded fund will end the years-long campaign to get a Bitcoin-based ETF approved. During the years since the first application in 2013, numerous applications have been rejected by the SEC.
The renewed optimism concerning applications for bitcoin futures ETFs came earlier this year when Gary Gensler, the Chairman of the Securities and Exchange Commission, stated that he supports such a structure and believes that it offers more protection to investors than ETFs linked directly to actual Bitcoin.
On Thursday, the investor education office of the SEC posted a link to a June bulletin, where it stated that “investors should understand that Bitcoin, including gaining exposure through the Bitcoin futures market, is a highly speculative investment.” This announcement was interpreted as an indication that an ETF would be launched any time soon.
The new fund of Proshares will trade under the ticker “BITO” and will have an expense ratio of 0.95%. This corresponds to an annual fee of $9.50 for every $1,000 invested.
Some Bitcoin experts have argued that using an ETF based on futures prices rather than Bitcoin itself means that the end user will have to bear the costs which could be easily cut down by using a fund based on the spot prices.
Futures are derivative financial contracts that allow investors to transact a commodity without owning the underlying asset. However, futures contracts have a specific month in which they expire, or they must be repurchased. This can also confer additional administration costs to the end user. On top of all, the accuracy of futures cannot always be guaranteed.