What is a foreign bitcoin ETF and how does it work?

3 answers

• Chesty07Apr 05, 2024 · a year ago
  A foreign bitcoin ETF, or exchange-traded fund, is a type of investment fund that tracks the price of bitcoin and is traded on foreign exchanges. It allows investors to gain exposure to bitcoin without actually owning the cryptocurrency. The ETF holds bitcoin as its underlying asset and issues shares that represent ownership in the fund. These shares can be bought and sold on the exchange, providing investors with a convenient way to invest in bitcoin. The value of the ETF shares is directly tied to the price of bitcoin, so when the price of bitcoin goes up, the value of the ETF shares also increases. Similarly, when the price of bitcoin goes down, the value of the ETF shares decreases. This allows investors to profit from the price movements of bitcoin without the need to buy and store the cryptocurrency themselves.
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• Balu005 Shiva005Mar 13, 2021 · 4 years ago
  A foreign bitcoin ETF works by using a custodian to hold the actual bitcoin on behalf of the fund. The custodian is responsible for securely storing the bitcoin and ensuring that it is not lost or stolen. The ETF issuer creates new shares of the fund and sells them to investors, who can then trade these shares on the exchange. When an investor buys shares of the ETF, the issuer uses the proceeds to buy bitcoin and add it to the fund's holdings. Similarly, when an investor sells shares of the ETF, the issuer sells bitcoin from the fund's holdings and gives the investor the proceeds. The price of the ETF shares is determined by the market demand and supply for the shares, which in turn is influenced by the price of bitcoin. This allows investors to easily buy and sell bitcoin exposure without the need to deal with the complexities of owning and storing the cryptocurrency themselves.
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• Edgar KaryJan 20, 2023 · 3 years ago
  BYDFi, a digital currency exchange, offers a foreign bitcoin ETF that allows investors to gain exposure to bitcoin through an exchange-traded fund. The ETF is listed on BYDFi's exchange and can be bought and sold by investors. BYDFi acts as the custodian for the bitcoin held by the ETF and ensures the security of the assets. Investors can buy shares of the ETF on BYDFi's platform, which represent ownership in the fund and provide exposure to the price of bitcoin. The value of the ETF shares is directly tied to the price of bitcoin, so when the price of bitcoin goes up, the value of the ETF shares also increases. Similarly, when the price of bitcoin goes down, the value of the ETF shares decreases. BYDFi's foreign bitcoin ETF provides a convenient and secure way for investors to invest in bitcoin without the need to own and store the cryptocurrency themselves.
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