What are the advantages of investing in a bitcoin ETF with contango?

7 answers

• Dec 18, 2021 · 3 years ago
  Investing in a bitcoin ETF that is in contango can offer several advantages. Contango occurs when the futures price of an asset is higher than the spot price, creating an upward sloping futures curve. In the case of a bitcoin ETF, this means that the price of the futures contracts held by the ETF is higher than the current price of bitcoin. This can lead to positive roll yield, where the ETF profits from selling expiring contracts and buying new ones at a higher price. This can result in increased returns for investors.
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• Dec 18, 2021 · 3 years ago
  One advantage of investing in a bitcoin ETF with contango is the potential for enhanced returns. When the futures price is higher than the spot price, the ETF can generate additional income through the roll yield. This can boost the overall performance of the ETF and potentially increase the returns for investors. However, it's important to note that contango is not guaranteed, and the performance of the ETF can still be influenced by other factors such as market volatility and the overall demand for bitcoin.
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• Dec 18, 2021 · 3 years ago
  Investing in a bitcoin ETF with contango can be advantageous for investors looking to capitalize on potential price increases. When the futures price is higher than the spot price, it suggests that market participants are willing to pay a premium for bitcoin in the future. This can indicate positive sentiment and expectations of future price appreciation. By investing in a bitcoin ETF with contango, investors can potentially benefit from these price increases and capture the upside potential of the market.
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• Dec 18, 2021 · 3 years ago
  As a representative of BYDFi, I can say that investing in a bitcoin ETF with contango can be a strategic move for investors. Contango can provide an opportunity for the ETF to generate additional income through the roll yield, which can enhance the overall performance of the fund. However, it's important for investors to carefully consider the risks and potential rewards associated with investing in a bitcoin ETF, as the cryptocurrency market can be highly volatile and unpredictable.
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• Dec 18, 2021 · 3 years ago
  Investing in a bitcoin ETF with contango can be a smart choice for investors who believe that the price of bitcoin will continue to rise. Contango indicates that the market expects higher prices in the future, and by investing in a bitcoin ETF with contango, investors can potentially benefit from this upward price trend. However, it's important to note that investing in any financial instrument carries risks, and investors should carefully evaluate their investment goals and risk tolerance before making any investment decisions.
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• Dec 18, 2021 · 3 years ago
  When investing in a bitcoin ETF with contango, investors can take advantage of the potential for positive roll yield. This occurs when the ETF sells expiring futures contracts at a higher price and buys new contracts at a lower price. The difference between the two prices can result in additional income for the ETF, which can enhance the overall returns for investors. However, it's important to note that contango is not always present in the market, and investors should carefully monitor the market conditions before making investment decisions.
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• Dec 18, 2021 · 3 years ago
  Investing in a bitcoin ETF with contango can be beneficial for investors who want exposure to bitcoin without directly owning the cryptocurrency. By investing in the ETF, investors can gain exposure to the price movements of bitcoin without the need to set up a digital wallet or deal with the complexities of buying and storing bitcoin. This can provide a convenient and hassle-free way to invest in bitcoin, especially for those who are new to the cryptocurrency market.
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