Exchange-traded funds can use futures as the assets that make up the fund. Futures ETFs give investors access to the futures market without having to trade on the futures markets. A futures contract is an agreement between a buyer and a seller based on an underlying asset.
What is an ETF & how does it work?
An ETF (a company) will purchase futures contracts and then offer a securitized version to investors. The ETF doesn't take possession of the underlying asset but continues to trade contracts to keep the futures ETF running. The fund will purchase contracts so that it mirrors the index that it is designed to track.
Where can I buy a bitcoin futures ETF?
There are several Bitcoin futures ETFs that trade on exchanges such as the New York Stock Exchange ARCA and Nasdaq: There are also Bitcoin futures ETFs that let investors short the cryptocurrency, such as the ProShares Short Bitcoin ETF (BITI).
Are bitcoin futures ETFs regulated by the CFTC?
The IRS tends to treat Bitcoin and other crypto as property while the Commodity Futures Trading Commission (CFTC) treats it as a commodity. Bitcoin Futures ETFs are regulated by the CFTC. Bitcoin futures ETFs are funds that bundle Bitcoin futures contracts.
