Bitcoin Futures ETFs: What To Know Before Investing

The SEC just approved futures-based Bitcoin ETFs that are now trading, but should you buy them? I don't think so.

In this video, I talk about why buying futures-based ETFs is far from the same thing as buying an ETF that holds real assets.

Futures-based ETFs can underperform the actual asset price over time because of "contango bleed," which is when higher-priced futures contracts trend toward the lower asset price over time.

Since futures-based ETFs hold futures and not real assets, your investment in these ETFs is exposed to the decay of futures contracts if the asset price doesn't increase.

== Recommended Resources/Videos ==

[pandorak]

Thank you for this video. I invested a small amount in BITO without doing the research. I have heard other's opinions which reflect the same sediment. Needless to say I sold after one day and escaped unscathed.

[rvnut]

Yup! the same reasons why I didn't go for it when it was coming out.

[xxblanksxx]

pretty sweet, good to know. Was thinking about selling bi weekly CCs or CSPs on this

[modernworld]

Thank you so much for learning us guys

[DanGonzalesDenver]

Chris do you have a favorite futures contracts explainer video? Something similar to your 3 hour options video.

[RB-vosl]

Hello why are you not making videos showing in the platform, how to do verticals. You are very knowledgeable about it, ? But doing in the platform will be more understandable, if you can using thinkorswing will be very good ? Thanks

[rayjukenl]

What is the point of a futures based etf then? Some leverage? Does it move faster percentage wise than Bitcoin if the price moves?

[uangweb]

During the bullish trend, it's also possible that it becomes backwardation, instead of contango.

[peterbahlo]

Future contacts don’t have time decay similar to options.

[vic-ir]

Great video. Very informative. Can it be used for hedging, say buy some OTM puts?

[andysmith]

Thanks for taking up your time to explain all of this to us. I have a question so I hope you see it here and can reply. Why when I open a Bull Vertical Spread - bought a call in the money at 70 /sold a call out of the money at 80 (stock price at 75), does the two positions work against each other. If the one side goes up the other side goes negative. Is that because of the Extrinsic value? Will it even out over time? After 2 days I was up 400 on one side then the other side was negative 465.

[roseboahen]

How can I purchase your S&P 500 course? Can I have the link? Thanks

[stevenporter]

Thank you. Just one thing: if fixed amount of Bitcoin and increasing demand isn't that inflation (exactly what Bitcoin was created to avoid)?

[johngutierrez]

How hard would it be to go long bitcoin and short BITO to harvest the decay of the futures?

[fiftium]

BTF is the second Bitcoin futures ETF. GBTC holds real bitcoins.

[alcidesfialho]

But ....sorry...you mentioned multiple times - if the spot asset price does not move....really ? do you expect bitcoin price not to move compare with the futures ? I am not saying you are not right, just that this explanation seems a bit under the assumption of a non volatile asset, which is not the case at all as we all know....

[polok]

2 month count down until the biggest pump and dump of worthless garbage ends in december