First Trust Advisors has rolled out two Bitcoin-centric strategy exchange-traded funds (ETFs). These are designed to offer investors a taste of Bitcoin while limiting losses and creating yield, stated the asset management firm. This development is in response to a surge in funds that aim to augment Bitcoin’s appeal to mainstream investors by providing custom exposure to the digital currency’s performance.
The ETF named FT Vest Bitcoin Strategy Floor15 (BFAP) aims to mirror Bitcoin’s performance up to a limited upside while curtailing the risk of drawdown to approximately 15%, as per First Trust’s announcement.
“Investors have shown a significant appetite for Bitcoin-linked ETFs over the past few years, but the potential for severe drawdowns has kept many away,” noted Ryan Issakainen, an ETF strategist at First Trust.
The other fund, FT Vest Bitcoin Strategy & Target Income ETF (DFII), is an actively managed fund that seeks to provide partial Bitcoin exposure while generating a yield that surpasses short-dated US Treasurys by at least 15%, according to the asset manager. The DFII fund “aims to leverage bitcoin’s high volatility to produce income by selling call options,” said Issakainen.
Bitcoin ETFs, launched in January 2024, became one of the most sought-after investment products of the previous year. As of April 4, spot BTC ETFs collectively manage approximately $93 billion in assets, as per Bitbo data. There is also a growing interest in other types of ETFs that offer tailored exposure to Bitcoin’s performance.
For instance, Grayscale, a crypto-focused asset manager, launched two Bitcoin strategy ETFs on April 2. Similar to First Trust’s ETFs, these instruments use financial derivatives for downside risk mitigation and income generation.
In March, Bitwise, another asset manager, introduced an ETF that holds stocks of companies with substantial Bitcoin treasuries. Spot BTC ETFs witnessed nearly $100 million in outflows on April 3 amid the increased market volatility following US President Donald Trump’s sweeping tariff announcement on April 2.
