ETF Trends | March 26, 2022
Simeon Hyman joins CNBC’s Bob Pisani and Grayscale Investments’ Dave Lavalle in a discussion on the changing landscape of bitcoin investing opportunities. Pisani says ProFunds was “in the right place at the right time” by launching the Bitcoin Strategy ProFund (BTCFX), the first publicly available U.S. mutual fund designed to provide investment results, before fees and expenses, that generally correspond to the performance of bitcoin by principally investing in bitcoin futures contracts. Hyman says the advantage of investing in the futures market “is clear-the futures market is regulated.” He says there are many ways “people will ultimately want to get bitcoin exposures, but this is certainly one way that will appeal to constituents.” Learn about the fund, view the prospectus, and read disclosures here.
Bitcoin and bitcoin futures are a relatively new asset class and the market for Bitcoin is subject to rapid changes and uncertainty. Bitcoin and bitcoin futures are subject to unique and substantial risks, including significant price volatility and lack of liquidity. The value of an investment in the Fund could decline significantly and without warning, including to zero. You should be prepared to lose your entire investment.
The Fund invests in bitcoin futures contracts. The Fund does not invest directly in or hold bitcoin. The price of bitcoin futures should be expected to differ from the current or “spot” price of bitcoin. Consequently, the performance of the Fund should be expected to differ from the performance of the spot price of bitcoin. The market for bitcoin futures may be less developed, and potentially less liquid and more volatile, than more established futures markets. Bitcoin futures are subject to margin requirements, collateral requirements and daily limits that may prevent the Fund from achieving its objective.
Bitcoin is largely unregulated and bitcoin investments may be more susceptible to fraud and manipulation than more regulated investments. Bitcoin is subject to rapid price swings, including as a result of actions and statements by influencers and the media.
If the Fund’s ability to obtain exposure to bitcoin-related investments consistent with its investment objective is disrupted for any reason, including as a result of a lack of liquidity, volatility or a disruption to the bitcoin futures market, or as a result of margin requirements or position limits applicable to the Fund, the Fund may not be able to achieve its investment objective and may experience significant losses. ProFunds may, in its sole discretion and without prior notice, limit or reject purchases or close the Fund to new investment. ProFunds may re-open the Fund in its sole discretion and without prior notice.
"Spot" price refers to the price of physical bitcoin that can be purchased for immediate delivery.