Financial Services Firm First Trust Seeks Approval for Bitcoin-Linked Product
First Trust, a financial services firm, has joined the growing list of companies filing for a Bitcoin exchange-traded fund (ETF). However, unlike a traditional spot ETF, First Trust has submitted a proposal for a Bitcoin Buffer ETF, which uses options to pursue a specific investment outcome.
What is a Buffer ETF?
A buffer ETF is designed to protect investors from potential losses during a market downturn by placing a limit or "buffer" on a stock's growth over a defined period. By using options, these types of funds offer a targeted level of downside protection while capping potential upside. The First Trust Bitcoin Buffer ETF aims to participate in the positive price returns of the Grayscale Bitcoin Trust or another exchange-traded product (ETP) that tracks the performance of Bitcoin.
Industry Expert Predicts More Unique Bitcoin ETF Strategies
Bloomberg ETF analyst James Seyffart took to social media to share his thoughts on the First Trust Bitcoin Buffer ETF. He mentioned that this type of fund provides protection against a set percentage of downside loss while limiting potential gains. Seyffart also expects to see more companies entering the market with unique strategies for offering Bitcoin exposure in the coming weeks.
Did you miss our previous article...
https://trendinginthenews.com/crypto-currency/openais-second-ai-startup-fund-now-accepting-applications
