On Wednesday, mutual fund provider ProFunds launched the first publicly available bitcoin mutual fund in the US.
The Bitcoin Strategy ProFund (BTCFX) will allow investors to hold bitcoin without needing to go through exchanges or store bitcoin in a digital wallet.
According to a statement by ProFunds CEO Michael L. Sapir, the fund is designed to make it easier for investors to include crypto in their portfolios.
“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 millions of investors are familiar with,” he said.
The fund would invest in CME bitcoin futures contracts, seeking to track the CME CF Bitcoin-Dollar US Settlement Price Index, a once-a-day benchmark index price which aggregates trade data from several Bitcoin-USD markets on major crypto exchanges.
The rate is also the basis of Valkyrie’s U.S. proposed bitcoin ETF, and is almost exactly the same as the CF Bitcoin Reference Rate that would underpin proposed ETFs by WisdomTree, First Trust, and Kryptoin. The main difference is that the CME version settles in London time, whereas the CF Bitcoin Reference Rate is calculated as of Eastern Time.
ProFunds, which was founded in 1997, has a long history of managing innovative funds. With its affiliate ProShares, ProFunds was the first issuer to launch leveraged and inverse ETFS in the U.S. in 2006 and today manages approximately $60 billion assets for investors.
Currently over a dozen applications for bitcoin and crypto asset ETFs sit on the desk of the SEC, however the regulator has continued to stall decision making on many of the current proposals.
Despite regulatory roadblocks, issuers have gotten creative and there are now more ways than ever to gain crypto exposure without holding actual crypto.
Bitcoin funds are already available to investors in several countries, including Canada and Brazil.
For more information, visit the Crypto Channel.