It’s been a little over a week since Invesco’s new bitcoin ETF was listed on the Cboe. But it’s already been raking in money, suggesting that demand for a regulated bitcoin investment vehicle is strong.
“Many advisors recently told VettaFi they are looking to add a small slice of client portfolios to Bitcoin in the first half of 2024,” said VettaFi’s head of research Todd Rosenbluth. “The cryptocurrency can offer an alternative to equities and fixed income.”
Opening the Floodgates for Spot Bitcoin ETFs
BTCO began trading alongside nine other spot bitcoin funds that the SEC approved. Other notable spot bitcoin ETFs that launched on Jan. 11 include the +Grayscale Bitcoin Trust ETF+ (GBTC ) and the +Bitwise Bitcoin ETF+ (BITB ). BlackRock, Fidelity, WisdomTree, and VanEck also launched funds last week.
Providing Bitcoin Exposure While Mitigating Risk
BTCO provides bitcoin exposure while mitigating the risk of managing personal digital wallets and dealing with unregulated crypto platforms. The fund charges 39 basis points. However, Invesco is waiving BTCO’s entire fee on assets up to $5 billion for the first six months after launch.
Invesco launched BTCO in partnership with Galaxy Asset Management, one of the world’s largest digital assets and blockchain investment managers. Invesco said in a statement that Galaxy has “deep knowledge of digital assets and experience in investing across all stages of the ecosystem.” This should “strengthen the operational risk management of the ETF.”
Research from Galaxy suggests that, with a base portfolio of 55% equities, 35% fixed income, 10% commodities, allocating 1% to bitcoin shows “the strongest marginal improvement to a portfolio’s risk-adjusted return.”
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