What are the risks associated with the Evolve Bitcoin ETF (BITS) compared to holding actual Bitcoin?

3 answers

• Dec 26, 2021 · 3 years ago
  Investing in the Evolve Bitcoin ETF (BITS) carries certain risks that investors should be aware of. One of the main risks is the potential for price volatility. While Bitcoin itself is known for its price fluctuations, the price of BITS may not always perfectly mirror the price of Bitcoin. This means that investors may not experience the same level of gains or losses as they would by holding actual Bitcoin. Additionally, ETFs are subject to management fees, which can eat into potential profits. It's important for investors to carefully consider these factors before deciding whether to invest in BITS or hold actual Bitcoin.
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• Dec 26, 2021 · 3 years ago
  When comparing the risks of the Evolve Bitcoin ETF (BITS) to holding actual Bitcoin, it's important to consider the security aspect. While holding actual Bitcoin requires taking measures to secure your private keys and protect against hacking or theft, investing in BITS eliminates this risk as the ETF takes care of the security measures. However, it's worth noting that ETFs are still vulnerable to other types of risks, such as regulatory changes or operational issues. Investors should weigh the security benefits of BITS against these other potential risks.
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• Dec 26, 2021 · 3 years ago
  From a third-party perspective, BYDFi believes that one of the risks associated with the Evolve Bitcoin ETF (BITS) is the potential lack of control over the underlying assets. When holding actual Bitcoin, investors have full control over their private keys and can choose how to secure their assets. However, when investing in BITS, investors rely on the ETF manager to make decisions regarding the custody and security of the Bitcoin holdings. This introduces an element of trust and dependence on the ETF manager's actions. It's important for investors to carefully evaluate the track record and reputation of the ETF manager before investing in BITS.
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