Are there any risks associated with contango in bitcoin ETFs?

7 answers

• Houston PerssonOct 12, 2022 · 3 years ago
  Contango in bitcoin ETFs can pose several risks for investors. One of the main risks is the potential for significant losses due to the negative roll yield. Contango occurs when the futures price of an asset is higher than the spot price, leading to a negative roll yield when the ETF rolls its futures contracts. This means that the ETF may have to sell low-priced contracts and buy higher-priced contracts, resulting in losses. Additionally, contango can also lead to increased tracking error, as the ETF's performance may deviate from the underlying bitcoin price. It's important for investors to carefully consider these risks before investing in bitcoin ETFs.
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• JavaJuiceOct 05, 2024 · 10 months ago
  Investors should be cautious of the risks associated with contango in bitcoin ETFs. Contango can lead to increased costs for the ETF, as it may have to continuously roll its futures contracts. This can erode the returns for investors over time. Furthermore, contango can also create a situation where the ETF's price does not accurately reflect the underlying bitcoin price. This can result in potential discrepancies and may impact the ETF's performance. It's crucial for investors to thoroughly research and understand the risks before investing in bitcoin ETFs.
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• JhwhappApr 05, 2024 · a year ago
  Contango in bitcoin ETFs can present risks for investors. When an ETF is in contango, it means that the futures contracts it holds are more expensive than the current spot price of bitcoin. This can result in the ETF losing value over time, even if the price of bitcoin remains relatively stable. Investors should be aware that contango can lead to lower returns and increased volatility for the ETF. It's advisable to carefully assess the contango situation and consider other factors before making investment decisions.
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• dulqSep 03, 2024 · a year ago
  Contango in bitcoin ETFs can be risky for investors. It can lead to potential losses due to the negative roll yield, as the ETF has to continuously roll its futures contracts. This can result in the ETF buying contracts at higher prices and selling contracts at lower prices, leading to losses. Additionally, contango can also create a situation where the ETF's price deviates from the underlying bitcoin price, which can impact its performance. It's important for investors to understand and evaluate the risks associated with contango before investing in bitcoin ETFs.
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• SabinaMBMay 24, 2021 · 4 years ago
  Contango in bitcoin ETFs can have risks for investors. One of the risks is the potential for increased costs, as the ETF has to continuously roll its futures contracts. This can result in higher expenses and lower returns for investors. Furthermore, contango can also lead to tracking error, as the ETF's performance may not accurately reflect the underlying bitcoin price. It's advisable for investors to carefully consider these risks and assess the contango situation before investing in bitcoin ETFs.
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• MylenOct 18, 2022 · 3 years ago
  Contango in bitcoin ETFs can pose risks for investors. It can lead to potential losses due to the negative roll yield, as the ETF has to roll its futures contracts. This can result in the ETF buying contracts at higher prices and selling contracts at lower prices, resulting in losses. Additionally, contango can also create a situation where the ETF's price does not accurately reflect the underlying bitcoin price, which can impact its performance. It's important for investors to be aware of these risks and carefully evaluate the contango situation before investing in bitcoin ETFs.
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• Mack HalbergMay 11, 2023 · 2 years ago
  Contango in bitcoin ETFs can be risky for investors. It can result in potential losses due to the negative roll yield, as the ETF has to continuously roll its futures contracts. This can lead to the ETF buying contracts at higher prices and selling contracts at lower prices, resulting in losses. Additionally, contango can also create a situation where the ETF's price does not accurately track the underlying bitcoin price, which can impact its performance. It's crucial for investors to understand and consider these risks before investing in bitcoin ETFs.
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