First Trust Advisors Launches Two New Bitcoin Strategy Exchange-Traded Funds

input: First Trust Advisors has unveiled two new Bitcoin strategy exchange-traded funds, adding to a suite of products that currently hold more than $28 billion in net assets.

First Trust Advisors is expanding its ETF lineup with two new Bitcoin strategy ETFs, expanding on a suite of products that now hold over $28 billion in net assets.

In an announcement on Tuesday, First Trust said it launched the two Bitcoin (BTC) strategy ETFs this week. The bitcoin exchange-traded funds are part of the the Floor15 ETF Series of Target Outcome ETFs, with both the FT Vest Bitcoin Strategy Floor15 ETF – April and the FT Vest Bitcoin Strategy & Target Income ETF listed on the NYSE Arca.

The funds are linked to a Harvest Volatility Control strategy, licensed from Harvest Exchange (OPEN) and managed by Vest Financial (Vest). Both ETFs will track BTC futures over a four-month period.

The April Floor15 ETF aims to provide investors with a buffer against market declines. Should the price of bitcoin fall below $38,000 at the start of April, the ETF will cap losses at 15% by the end of May. However, if bitcoin rises above $52,000, the ETF’s gains will be limited to 15%.

The Bitcoin Strategy & Target Income ETF is designed for investors looking to generate income from selling options on bitcoin. The fund, which is actively managed, will allocate 80% of its net assets to bitcoin and 20% to income-generating investments.

“The FT Vest Bitcoin Strategy Floor15 ETF – April represents an innovative step forward in risk-managed cryptocurrency investing. By structuring investments with a defined floor and upside cap, we provide investors with a more controlled way to engage with bitcoin while mitigating downside exposure. This strategy reflects Vest’s commitment to outcome-focused solutions that deliver more certainty and clarity to portfolios,” said Jeff Chang, president of Vest.

First Trust’s Target Outcome ETFs provide investors with a defined risk and return profile for a specific period, typically one year. These funds use a combination of derivatives, fixed income and equity securities to achieve their stated objectives.

First Trust’s Target Outcome ETFs have seen a 53% spike in net assets in the past year, reaching over $28 billion by the end of February.

“We believe these new ETFs will be in demand as investors continue to seek exposure to bitcoin in a leveraged manner. The 'Floor15' ETF offers a unique way to participate in bitcoin's upside potential with clarity on downside risk,” said Ryan Issakainen, senior vice president and ETF strategist at First Trust.

Issakainen added that the Bitcoin Strategy & Target Income ETF will likely gain traction for its potential to generate income from selling call options on bitcoin, which is a strategy often used by professional investors.

“With its high volatility, bitcoin presents an opportunity for investors to generate income by selling options. This strategy is designed for investors who are neutral or slightly bearish on bitcoin in the near term and want to collect premium income.”