BITU’s Decay Problem: Why This Bitcoin ETF Lost 31% While Bitcoin Fell Just 10%
Volatility decay erodes returns when Bitcoin moves sideways or reverses: a 50% Bitcoin drawdown would near-total wipeout the leveraged fund.
BITU works only for single-day trades or strong uptrends; buy-and-hold investors face compounding losses from daily resets in choppy markets.
The ******* yst who called NVIDIA in 2010 just named his top 10 stocks and BITU wasn't one of them. Get them here FREE.
ProShares Ultra Bitcoin ETF (NYSEARCA:BITU) gives traders 2x daily exposure to the Bloomberg Bitcoin Index through swaps, with a 0.98% expense ratio. The appeal is simple: when Bitcoin moves, BITU moves twice as hard, without the hassle of holding crypto directly. The structure is complex, and the gap between what holders expect and what they get is where the real risk lives.
BITU resets daily. The fund delivers 2x of one trading day's Bitcoin return, then starts over. Compounded across many days, results diverge from a static 2x of Bitcoin's ******* ulative move, and the divergence almost always works against the holder when the path is choppy.
https://finance.yahoo.com/...
Volatility decay erodes returns when Bitcoin moves sideways or reverses: a 50% Bitcoin drawdown would near-total wipeout the leveraged fund.
BITU works only for single-day trades or strong uptrends; buy-and-hold investors face compounding losses from daily resets in choppy markets.
The ******* yst who called NVIDIA in 2010 just named his top 10 stocks and BITU wasn't one of them. Get them here FREE.
ProShares Ultra Bitcoin ETF (NYSEARCA:BITU) gives traders 2x daily exposure to the Bloomberg Bitcoin Index through swaps, with a 0.98% expense ratio. The appeal is simple: when Bitcoin moves, BITU moves twice as hard, without the hassle of holding crypto directly. The structure is complex, and the gap between what holders expect and what they get is where the real risk lives.
BITU resets daily. The fund delivers 2x of one trading day's Bitcoin return, then starts over. Compounded across many days, results diverge from a static 2x of Bitcoin's ******* ulative move, and the divergence almost always works against the holder when the path is choppy.
https://finance.yahoo.com/...
29 days ago
