First Trust Advisors launches two BitcoinsBTCThe asset manager stated that the exchange traded funds (ETFs), which are designed to give investors exposure to Bitcoin while limiting losses and earning a yield, were created with this strategy.
This move is part of a larger effort to increase Bitcoin’s appeal among traditional investors through tailored exposures to its performance.
First Trust announced that the FT Vest Bitcoin Floor15 ETF is designed to follow Bitcoin’s performance to a capped maximum upside, while limiting its drawdown to 15%. announcement.
“Over the past few years, investors have shown a remarkably strong appetite for bitcoin-linked ETFs, but the potential for sharp drawdowns has kept many on the sidelines,” Ryan Issakainen is an ETF Strategist at First Trust.
First Trust launches two Bitcoin Strategy Funds Source: First Trust
The FT Vest Bitcoin Strategy & Target Income ETF (DFII) is an actively managed fund aiming to offer partial Bitcoin exposure while generating a yield that beats short-dated US Treasurys by at least 15%, according to the asset manager.
The DFII fund “will seek to take advantage of bitcoin’s high volatility to generate income by selling call options,” Issakainen said. To hedge against downside risks, the BFAP Fund also uses financial derivatives.
Options are contracts granting the right to buy You can also find out more about sell — “call” or “put,” in trader parlance — an underlying asset at a certain price.
Related: Trump-linked Strive files for ‘Bitcoin Bond’ ETF
Bitcoin Structured Funds
Bitcoin ETFs, which will be launched in January 2024 as a new investment product, were one of the most popular products last year.
Spot BTC ETFs manage approximately $93 Billion in assets according to data Bitbo
Bitcoin ETFs experienced a decline in value after US President Trump’s tariff announcement. Source: Farside Investors
Popularity is also growing for other types of ETFs that offer a tailored exposure to Bitcoin’s performance.
On April 2, Grayscale — a cryptocurrency-focused asset manager — launched two Bitcoin strategy ETFs. They use derivatives like First Trust ETFs in order to maximize income and minimize downside risks.
Bitwise has launched an ETF portfolio in March. stocks of companies with large Bitcoin treasuries.
The Spot BTC exchange-traded funds saw outflows of nearly $100m on the 3rd April amid increased market volatility after US President Donald Trump announced sweeping tariffs.
Magazine: Bitcoin ATH sooner than expected? XRP may drop 40%, and more: Hodler’s Digest, March 23 – 29
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Source: cointelegraph.com
