Investing in Bitcoin ETFs Quiz

1. What is a Bitcoin ETF?

• A government-issued currency that operates alongside Bitcoin.
• A digital wallet specifically for storing Bitcoin securely.
• A type of cryptocurrency that is mined through complex algorithms.
• An exchange-traded fund that tracks the price of Bitcoin and is traded on traditional stock exchanges.

2. How do Bitcoin futures ETFs work?

• They hold a wide range of cryptocurrencies in their funds.
• They directly buy and sell Bitcoin to manage the portfolio.
• They invest exclusively in traditional stocks alongside Bitcoin.
• They use futures contracts to achieve exposure to Bitcoin`s price movements.

3. What are the primary types of Bitcoin ETFs?

• Bitcoin hedge ETFs and Bitcoin leverage ETFs.
• Bitcoin mining ETFs and Bitcoin dividend ETFs.
• Bitcoin spot ETFs and Bitcoin futures ETFs.
• Bitcoin savings ETFs and Bitcoin lending ETFs.

4. What do Bitcoin spot ETFs do?

• They generate profits by trading Bitcoin derivatives exclusively.
• They mirror Bitcoin`s real-time market price and are backed by actual Bitcoin holdings.
• They invest in blockchain technology companies instead of Bitcoin itself.
• They focus on Bitcoin futures contracts and do not hold Bitcoin directly.

5. What do Bitcoin futures ETFs do?

• They provide loans using Bitcoin as collateral.
• They operate based on Bitcoin spot market prices exclusively.
• They focus on Bitcoin futures contracts and do not hold Bitcoin directly.
• They invest in physical Bitcoin and store it in wallets.

6. Which exchanges trade Bitcoin futures ETFs?

• Tokyo Stock Exchange and London Stock Exchange
• Chicago Mercantile Exchange and AMEX
• The New York Stock Exchange ARCA and Nasdaq
• Frankfurt Stock Exchange and Sydney Stock Exchange

7. Which ETFs are known for their active management?

• The Valkyrie Bitcoin Strategy ETF.
• The iShares Core S&P 500 ETF.
• The SPDR Gold Shares ETF.
• The Invesco QQQ Trust.

8. Which ETF diversifies by including blockchain stocks alongside Bitcoin futures?

• The Global X Blockchain & Bitcoin Strategy ETF
• The Valkyrie Bitcoin Miners ETF
• The Bitwise Bitcoin and Ether Equal Weight Strategy ETF
• The ProShares Bitcoin Strategy Fund

9. What is the ProShares Bitcoin Strategy Fund designed to do?

• It is designed to hold Bitcoin futures contracts and related securities.
• It is designed to create new Bitcoin tokens directly.
• It is designed to invest solely in physical Bitcoin assets.
• It is designed to provide guaranteed returns on Bitcoin investments.

10. How do investors typically purchase Bitcoin futures ETFs?

• Investors can buy them directly from Bitcoin mining companies.
• Investors can purchase them through their broker or advisor if they offer them.
• Investors can only acquire them via peer-to-peer transactions.
• Investors purchase them only through cryptocurrency exchanges.

11. What is the ProShares Short Bitcoin ETF (BITI)?

• It is a fund that exclusively holds Bitcoin.
• It provides leverage for buying Bitcoin.
• It allows investors to short the cryptocurrency.
• It focuses on Bitcoin-related stocks only.

12. What are the key considerations when choosing a Bitcoin ETF?

• Fees, liquidity, track record, and investment horizon.
• Tax implications, insider trading, corporate governance, and bond ratings.
• Asset allocation, risk management, market cap, and exit strategy.
• Historical dividends, company earnings, stock options, and shareholder rights.

13. How do fees impact Bitcoin ETFs?

• Fees only influence the price of Bitcoin itself, not the ETF returns.
• Fees are reflected in the ETF`s expense ratio and can impact overall returns.
• Fees are ignored by most investors when buying Bitcoin ETFs.
• Fees do not affect the trading volume of the ETF significantly.

14. Why is liquidity important for Bitcoin ETFs?

• It guarantees a stable price for Bitcoin regardless of market conditions.
• It allows for easier entry and exit from the market, which is especially important in the volatile crypto sector.
• It ensures that Bitcoin ETFs can only invest in a fixed amount of Bitcoin.
• It primarily affects the fees associated with the ETF and its expense ratio.

15. What is the significance of a Bitcoin ETF`s past performance?

• It affects the fund`s advertising and marketing strategies.
• It guarantees higher returns for future investments.
• It offers insights into the fund`s management and stability.
• It determines the ETF`s trading volume on exchanges.

16. How does a Bitcoin ETF`s investment horizon affect its suitability?

• Bitcoin ETFs are primarily for short-term trading and speculators.
• Bitcoin ETFs are better suited for investors with a longer-term outlook.
• Bitcoin ETFs are suitable for all investors regardless of horizon.
• Bitcoin ETFs have no connection to investment horizons.

17. What are the regulatory constraints in the US regarding Bitcoin ETFs?

• US regulations prevent trading any form of cryptocurrency ETFs.
• All Bitcoin ETFs are approved without restrictions in the US.
• The US primarily offers futures-based Bitcoin ETFs due to regulatory constraints that limit direct exposure to Bitcoin.
• Bitcoin ETFs in the US must only invest in gold.

18. What is the difference between US-based and international Bitcoin ETFs?

• US-based ETFs are only available in the US, while international ETFs can be traded anywhere.
• US-based ETFs are primarily futures-based, while international ETFs often hold actual Bitcoin.
• US-based ETFs allow unlimited Bitcoin holdings, while international ETFs do not.
• US-based ETFs only track Bitcoin`s price without actual holdings, while international ETFs hold Bitcoin directly.

19. What is the iShares Bitcoin Trust (IBIT)?

• It is a spot Bitcoin ETF that has returned 110% since its debut in January 2024 and closely tracks the price of Bitcoin.
• It is a mining operation that produces Bitcoin and sells it on the market.
• It is a futures-based Bitcoin fund that exclusively trades on international exchanges.
• It is a cryptocurrency wallet service allowing direct Bitcoin purchases.

20. Why have spot Bitcoin ETFs been successful?

• They exclusively invest in blockchain technology companies instead of Bitcoin.
• They aim to lower transaction fees for Bitcoin trading on exchanges.
• They provide regulated and accessible exposure to Bitcoin without the need for direct purchase.
• They use futures contracts to ensure price stability for investors.

21. How have institutional investors contributed to the success of spot Bitcoin ETFs?

• Institutional investors have primarily focused on Bitcoin futures ETFs instead of spot ETFs.
• Institutional investors have reduced their holdings, leading to decreased interest from the public.
• Institutional investors have avoided investing in spot Bitcoin ETFs due to regulatory concerns.
• Institutional investors have significantly increased participation, boosting confidence and attracting more retail interest.

22. What are the implications of institutional investors adopting spot Bitcoin ETFs?

• It will result in a decrease in Bitcoin`s market transparency and liquidity.
• It could cause a major shift away from traditional investment strategies towards cryptocurrency-only portfolios.
• It may lead to increased regulations and restrictions on Bitcoin trading.
• It could drive Bitcoin`s price higher as institutional investors allocate a significant portion of their assets to the cryptocurrency.

23. What is the significance of options trading on the iShares Bitcoin Trust?

• It limits the trading of Bitcoin to retail investors only.
• It makes Bitcoin trading less accessible and more complicated for users.
• It prevents institutional investors from entering the Bitcoin market.
• It provides another catalyst for institutional adoption by allowing investors to hedge their positions using put options.

24. How do put options help institutional investors?

• They provide capital for institutional investors to fund new investments in emerging markets.
• They allow institutional investors to buy more Bitcoin at a lower market price in the future.
• They help protect portfolios from potential Bitcoin crashes by allowing investors to sell securities at a specific price during a predetermined period.
• They guarantee profits for institutional investors by locking in high prices for Bitcoin.

25. What is the current status of options trading on the iShares Bitcoin Trust?

• It was launched by the NYSE in January 2023.
• It was introduced by the Nasdaq Stock Exchange in November 2024.
• It was banned by the SEC in December 2023.
• It has been suspended indefinitely by major exchanges.

26. What are the fees associated with the Global X Blockchain & Bitcoin Strategy ETF (BITS)?

• The fee is 0.75%.
• The fee is 1.24%.
• The fee is 0.92%.
• The fee is 0.65%.

27. What are the fees associated with the Valkyrie Bitcoin Miners ETF (WGMI)?

• The fee is 1.24%.
• The fee is 0.92%.
• The fee is 0.75%.
• The fee is 0.65%.

28. What are the fees associated with the Bitwise Bitcoin Strategy Optimum Roll ETF (BITC)?

• The fee is 0.75%, reduced to 0.70% until March 15, 2025.
• The fee is 0.92%, reduced to 0.85% until February 6, 2025.
• The fee is 0.95%, reduced to 0.90% until December 31, 2024.
• The fee is 1.24%, reduced to 1.15% until January 1, 2025.

29. What are the fees associated with the ProShares Bitcoin Strategy ETF (BITO)?

• The fee is 1.20%.
• The fee is 0.95%.
• The fee is 0.85%.
• The fee is 0.50%.

30. What are the fees associated with the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP)?

• 1.24%, reduced to 1.10% until November 2025.
• 0.95%, reduced to 0.85% until October 2, 2025.
• 0.75%, unchanged until further notice.
• 0.65%, increased to 0.70% after one year.