Cryptocurrency Q&A
What is a Bitcoin Trust & a spot bitcoin ETF?
What is a Bitcoin Trust & a spot bitcoin ETF?
Andrea
Tue Jul 09 2024
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6 answers
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Could you elaborate on the concept of a Bitcoin Trust and a spot bitcoin ETF? I'm particularly interested in understanding the key differences between the two. A Bitcoin Trust, I've heard, is a vehicle that allows investors to gain exposure to Bitcoin's price movements without directly owning the cryptocurrency. How does it work, and what are its advantages and disadvantages? On the other hand, a spot bitcoin ETF seems to be a newer investment product. Could you explain its functionality and how it differs from a Bitcoin Trust? Additionally, what are the potential risks and rewards associated with investing in these two types of products?
6 answers
Martino
Thu Jul 11 2024
A bitcoin trust represents a unique investment vehicle, specifically tailored for those interested in solely investing in bitcoin.
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MountFujiView
Wed Jul 10 2024
This closed-end fund structure entails the investment of all funds into bitcoin, with no other assets included.
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Federico
Wed Jul 10 2024
In contrast, a spot bitcoin ETF offers a more dynamic approach. As an open-end fund, it allows for a more flexible share issuance system.
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TaegeukChampionCourageousHeart
Wed Jul 10 2024
However, it's worth noting that the shares of such trusts, such as the Grayscale Bitcoin Trust, are not redeemable for the underlying bitcoin itself.
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Andrea
Wed Jul 10 2024
This means that investors cannot directly exchange their trust shares for bitcoins at a set ratio.
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