First Trust, a financial services company It is the latest company to apply to launch a Bitcoin ETF, but it is not a spot ETF, but rather a “Bitcoin Buffer ETF” intended to help investors reduce risk.
On December 14, First Trust sendForm N1-A filed with the U.S. Securities and Exchange Commission (SEC) to launch a new Bitcoin-linked product called First Trust Bitcoin Buffer ETF.
The fund is designed to participate in positive price returns before fees and expenses of Grayscale Bitcoin Trust or other ETP products.
Buffer ETFs are designed to protect investors from market losses by buffering or limiting the growth of stocks over a specified period of time. Also known as “defined-outcome ETF” by Buffer ETF uses options to guarantee investment results. and attempts to provide downside protection if the market experiences negative returns.
James Seyffart, a Bloomberg ETF analyst, took to X (formerly Twitter) to comment on the First Trust Bitcoin Buffer ETF, stating that this type of fund provides some percentage protection against downside losses.
“And we expect to see other players enter this space with unique and different strategies. in the coming weeks,” Seyffart added.
According to data from ETF.com, there are currently 139 Buffer ETFs traded on the US market. With total assets under management of $32.54 billion, Buffer ETFs can be found in assets such as equities, commodities and cryptocurrencies. and debt instruments
refer : cointelegraph.com
picture cryptotimes.io
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