ProFunds, a Maryland-based firm, on Wednesday launched what it says is the first publicly available mutual fund correlated to the value of the largest cryptocurrency. The Bitcoin Strategy ProFund invests in Bitcoin futures contracts and aims for results that track the price of the digital currency — before fees.
It’s the latest financial product offering exposure to Bitcoin, as firms clamor to create ways for clients to grab a piece of the once-obscure digital asset.
More than a dozen investment firms have filed to launch exchange-traded funds that invest in Bitcoin or Bitcoin futures, but so far U.S. regulators haven’t issued any decisions. In June, the Securities and Exchange Commission punted on a decision on whether to approve a Bitcoin ETF for the second time in 2021.
The debut coincides with Bitcoin’s longest winning streak this year, with the token rising as much as 7.5% on Wednesday and climbing back above $40,900. The cryptocurrency’s price has swung wildly over the past year, and the SEC has warned investors that they should be aware of the risks of investing in mutual funds that hold Bitcoin futures.
Buying Bitcoin and other crypto coins directly has gotten easier, as companies such as Robinhood Markets Inc. and Cash App have created ways to put money into the coins without going through the arduous process of opening a digital wallet or storing vital passwords.
Still, some people and institutions want to buy products with some regulatory oversight. Everyday investors typically are much more familiar with mutual funds than the intricacies of the cryptocurrency market.
The ProFunds product has a total expense ratio of 1.15%, which is a bit higher than the typical 1% or less charged in ETFs.
“Compared to directly buying Bitcoin, which may involve opening a new account with an unregulated party, this ProFund offers investors the opportunity to gain exposure to Bitcoin through a form and investment method that tens of millions of investors are familiar with,” ProFunds Chief Executive Officer Michael Sapir said in a release.