Bitcoin futures highlight some pitfalls for new ETFs

The launch of the first bitcoin futures exchange traded fund (ETF) on Tuesday marks a major step toward legitimising the cryptocurrency, but some ETF investors may face higher costs compared with buying the digital currency itself.

Barring any last-minute objection from the US Securities and Exchange Commission, the ProShares Bitcoin Strategy ETF will begin trading on Tuesday. ProShares will be backed by the CME Group’s bitcoin futures instead of the actual virtual asset itself.

Its offering is expected to lead to more launches of futures-based ETFs in the coming days and weeks after years of regulatory roadblocks.