Alternative Investments/Digital: ProFunds Launches Bitcoin Mutual Fund That Will Invest In Futures
The Bitcoin Strategy ProFund is the first open-end U.S. mutual fund tracking bitcoin prices.
Mutual fund issuer, Bethesda-based ProFunds launched last week an innovative bitcoin mutual fund suitable for retail investors looking to invest in the leading crypto currency without the risks and hassles of holding it in wallets or exchange accounts. The Bitcoin Strategy ProFund (BTCFX) is the first open-ended U.S. mutual fund that will track bitcoin prices. (Barron’s)
Bitcoin Strategy ProFund (BTCFX)
The fund says: “The Fund seeks to provide capital appreciation by investing all or substantially all of its assets through actively managed exposure to bitcoin futures contracts. The Fund does not invest directly in bitcoin.”
That is therefore different from spot trades. Futures and spot bitcoin prices may differ marginally, and investors should also factor in costs and fees to work out their net gain (or loss) after the price movement.
The fund will keep itself invested in front-month bitcoin futures; on their expiry, it will “roll over” to the next front-month futures contract.
“Cryptocurrency has become a significant asset class, and our new Bitcoin Strategy ProFund provides investors access to a bitcoin strategy through a mutual fund investment,” ProFund CEO Michael L. Sapir said in a statement. “Compared to directly buying bitcoin, which may involve opening a new account with an unregulated party, this ProFund offers investors the opportunity to gain exposure to bitcoin through a form and investment method that tens of millions of investors are familiar with.”
The minimum investment amount is $1,000.
“Bitcoin futures have been trading for a while, but putting them in a mutual fund changes the game for advisors,” Bitwise Asset Management Chief Investment Officer Matthew Hougan told Barron’s. “This is an important milestone.”
However, there is a Canadian precedent for a bitcoin mutual fund.
In April, CI Global Asset Management launched the first mutual fund to offer exposure to bitcoin – The CI Bitcoin Fund. It requires a minimum investment of only $500.
However, this mutual fund invests in in the CI Galaxy Bitcoin ETF, which trades on the Toronto Stock Exchange under the ticker (TSX: BTCX).
Related Story: North America’s First Bitcoin Mutual Fund From CI Global
Latest Alternative Investment News
FinTech: Klarna’s All-In Efforts To Achieve Profitability Getting Traction
Swedish fintech company Klarna achieved a significant improvement in its financial performance during the first quarter, as it halved its net loss compared to the same period last year. The…
Alternative Investments/AI: Euclidean Technologies Launches ETF For AI-Selected Value Stocks
Seattle-based investment advisor Euclidean Technologies Management has launched its first exchange-traded fund (ETF), the Euclidean Fundamental Value ETF (ECML US). The actively managed US equity fund utilizes artificial intelligence (AI)…
Venture Capital: Matrix Partners Raises $550M For Its Fourth India Fund
Matrix Partners India, a venture capital firm focused on investments in India, has announced the closure of its latest fund, securing over $550 million in commitments. This new fund from…
Artificial Intelligence: AI Helps Researchers Find A Compound To Kill The Drug-Resistant A. baumannii Bacterium
Scientists at MIT and McMaster University have used artificial intelligence (AI) to identify a new antibiotic that can combat drug-resistant infections caused by Acinetobacter baumannii. The bacterium is commonly found…