Nov 3, 2021
Cryptocurrency and Exchange-Traded Funds have been two of the most popular areas in the investment market in recent years. Lately we’ve been observing increasing interest among investors using a combination of cryptocurrencies and ETFs, and we dedicated today’s episode to exploring the possibilities and concerns related to this new addition to the investment arena. Throughout the episode, Grant dives into how Bitcoin ETFs work, the pros and cons of them, and what you should keep in mind if you’re interested in Bitcoin ETFs.
[02:09] Recent Developments – Grant starts the discussion with a review of how and why cryptocurrencies grew in popularity over the last few years.
[04:37] Diversity of ETFs – How the diverse nature of the ETFs allowed them to utilize cryptocurrencies and the challenges associated with getting a cryptocurrency involved in a mainstream investment vehicle.
[08:12] Newcomers to the Market – Grant reviews a couple of newly introduced ETFs that are backed by Bitcoin and the pros and cons of investing in these compared to a traditional ETF.
[10:48] Futures Contracts – How the futures markets work and how they relate to the way crypto-backed ETFs function.
[14:36] Obscure Costs – Because of the way BTC-backed ETFs are connected to futures contracts, there are some costs involved in the process that may go unnoticed. Grant explains what investors need to keep in mind about the costs of the Bitcoin ETFs.
[16:41] Leveraged ETFs & Mutual Funds – Grant shares his thoughts on the functionality of the two investment vehicles and the similarities they share with Bitcoin ETFs.
[20:10] Bond Funds – Grant explains the difference between how bond funds operate versus investment vehicles based on futures contracts.
Resources:
The Wall Street Journal - ETFs Are a Bad Way to Bet on Bitcoin: wsj.com/articles/etfs-are-a-bad-way-to-bet-on-bitcoin-11635261745
The Wall Street Journal - Bitcoin ETF’s Success Could Come at Fundholders’ Expense: wsj.com/articles/bitcoin-etfs-success-could-come-at-fundholders-expense-11635080580