Heavy demand for the first bitcoin ETF, which was listed yesterday.

With $700m of trading volume, BITO attracted way more interest than the first S&P 500 ETF on its first day.

But be wary of hidden costs!

• The expense ratio (management fee) of 0.95%. That level would not be that high for esoteric assets, BUT the fund is not trading any esoteric asset. It is investing in CME-listed futures. So it is a high-margin product for the issuer.
• More importantly, because the fund invests in futures, not in cash, it is exposed to the futures’s repo (aka the rolling cost). The repo trades around 17% right now. The fund will lose 15-20% per year in rolling costs! That makes it a VERY expensive vehicle.
• It will place its cash in T-Bills (<1Y), aka earn virtually no interest, but that’s standard these days.
• Its tax efficiency is still imprecise, and they could pass through to you. You may end up with tax bills as a shareholder.

Oh, did I forget this? There is some imprecision on the long-term value of its asset and you should expect some volatility…