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
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