Source: First TrustThe FT Vest Bitcoin Strategy & Target Income ETF (DFII) is an actively managed fund aiming to offer partial Bitcoin exposure while generating a yield that beats short-dated US Treasurys by at least 15%, according to the asset manager. The DFII fund “will seek to take advantage of bitcoin’s high volatility to generate income by selling call options,” Issakainen said. The BFAP fund also uses financial derivatives to hedge downside risk. Options are contracts granting the right to buy or sell — “call” or “put,” in trader parlance — an underlying asset at a certain price.
First Trust Advisors has launched two Bitcoin (BTC) strategy exchange-traded funds (ETFs) designed to provide investors with Bitcoin exposure while capping losses and earning yield, the asset manager said. The move comes amid an outpouring of funds seeking to enhance Bitcoin’s appeal to traditional investors by offering tailored exposure to the cryptocurrency’s performance.
The FT Vest Bitcoin Strategy Floor15 ETF (BFAP) is designed to track Bitcoin’s performance up to a capped upside while limiting drawdown risk to approximately 15%, First Trust said in an announcement.“Over the past few years, investors have shown a remarkably strong appetite for bitcoin-linked ETFs, but the potential for sharp drawdowns has kept many on the sidelines,” Ryan Issakainen, an ETF strategist at First Trust, said in a statement.
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Author / Journalist: Cointelegraph by Alex O’Donnell
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