Image of the article author, Michael Paciotti

First U.S. Crypto ETF Set to Launch This Week

With the anticipated launch of the first U.S. listed crypto ETF just 24 hours away, there are a few key considerations that must be understood by investors who eagerly await its launch. 

First, regardless of if you are in the pro-crypto or anti-crypto camp, this is a titanic leap forward for the industry.  If crypto is ever to be fully appreciated as a mainstream investment, U.S. regulatory approval is part of that process.  That said, it is important to understand that those who choose to participate via the newly-launched ETF will do so through futures contracts on Bitcoin…not actual Bitcoin itself.  This could result in steep costs beyond the stated expense ratio of the ETF, in the form of roll yield. As with any futures contract, roll yield can negatively impact investor returns, as contracts are rolled from the expiring contract into a future contract. Additionally, like investors learned when they tried to capture the rebound in plummeting oil prices during the early days of the pandemic, spot and futures performance can diverge meaningfully.

As is always the case, we encourage investors to know what they own before making any investment decisions.