How to buy ProShares Bitcoin Strategy ETF shares

The Bitcoin ProShares Strategy ETF (BITO) was the first Bitcoin ETF to list on an American ETF exchange. This page explains how you can buy shares in the ETF by taking you through a step-by-step process.
By: James Knight
James Knight
When he isn’t at work, James is an avid trader and golfer who likes to travel. He once fed,… read more.
Updated: Oct 25, 2021

This guide covers one of the simplest ways to invest in Bitcoin; an ETF. ETFs are ‘exchange-traded funds’, regulated funds that you can buy or sell shares in, just like a company’s ETF. Here we explain everything you need to know about the Bitcoin ProShares ETF, a fund that gives you the chance to get exposure to Bitcoin.

Compare the best Bitcoin Proshares trading platforms

To get shares in any ETF you need to use an online broker. A broker is the platform that executes any trades you want to make, and you should aim for one that charges a low fee per trade. The platforms below are a good place to start, or you can keep reading to learn more about the ProShares ETF.

1
Min. Deposit
$50
Promotion
User Score
10
Trade/invest in stocks with just $50
Invest for dividends and get payout on stocks on Ex-Dividend day
Over 11 payment methods, including PayPal
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro users can connect with, learn from, and copy or get copied by other users. Buying stocks on eToro is free and you can invest with as little as $50.
Payment Methods
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$1
Promotion
User Score
9.3
0 Commissions and no deposit minimums
Registered with and regulated by SEC and FINRA
Loss of cash protection
Start Trading
Description:
Financial company driven by technology and offering all-in-one self-directed investment platform that provides excellent user experience.
Payment Methods
Full regulations list:

How to buy the ProShares Strategy ETF, a step-by-step guide

The process of investing in an ETF isn’t massively complicated, so don’t worry even if you’re new to investing. These are the steps to follow in order to complete your investment:

  1. Choose a broker. You will need to use an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
  2. Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
  3. Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in the Bitcoin Strategy ETF.
  4. Place an order for the BITO ETF. Search for the ProShares Bitcoin Strategy ticker symbol (BITO) and see the current price at which the ETF is trading. If you’re happy with the price, enter the amount of shares you wish to own and place your order.
  5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your shares will be listed in your account. Congratulations, you’ve just invested in a Bitcoin ETF.

Should I invest in Bitcoin ProShares?

It’s one of the best options if you want to invest in Bitcoin, but don’t want to buy the coins outright. ProShares Bitcoin Strategy is an ETF, which is a regulated fund that trades on a stock exchange (the NASDAQ, in this case). That means there is a lot more investor protection than is normally the case with cryptocurrency.

The way the ETF works is that it uses futures contracts to track the Bitcoin price, and shares in the fund rise and fall in value as Bitcoin itself does. Another advantage of an ETF as opposed to investing directly in Bitcoin is that a share in the ETF is significantly cheaper than a coin (although, of course, the gains are correspondingly smaller).

If you want to dip your toe into cryptocurrency for the first time, or want to invest in it in a safer way than has been possible before, then an ETF might be the way to go. However, it’s important to remember that an ETF doesn’t offer price stability; it’s likely to be a volatile investment because its value fluctuates along with the assets it owns.

How has the ETF performed in recent years?

The ProShares ETF has only been available since October 2021, so there isn’t much history to go on. Bitcoin itself has been on a tear since the second half of 2020, when each coin was valued at less than $10,000. It spent all of 2021 above $20,000, and most of the year much higher than that.

As it was the first Bitcoin ETF to start trading on a US stock exchange, the ProShares fund generated an avalanche of interest on its inception date. That interest caused money to flow into the ETF – more than $1 billion in the first couple of days – and helped Bitcoin to an all-time high.

Part of the reason for that is the securities and exchange commission (SEC), the financial regulator in the US, approving an ETF is the only way it can list on a stock exchange. The arrival of the ProShares ETF represented another step on the path to mainstream acceptance of Bitcoin. It’s the confidence that step inspired in the community that drove the coin to its new highs.

Is it a good time to buy the Bitcoin Strategy ETF now?

There are a few things to consider before you make that decision. The first is that it’s always riskier to put money into something straight after it’s become available. That’s true for individual stocks, coins, and ETFs. Those periods tend to be more volatile.

Another consideration is that Bitcoin itself is volatile, while still another is that the BITO fund has been followed by a number of other, similar ETFs. The success of any one of these funds relies on a lot of factors outside of its control; such as whether another fund offers lower management fees, as well as the many different things that affect the price of Bitcoin.

ETFs are generally safe investments for many reasons, one of which is normally their diversity. By owning lots of different assets, the performance of one is less influential. That’s not the case here, as the fund relies entirely on Bitcoin. That means that before you invest you need to decide how you think the coin is going to perform, and you can use our analysis below to help you.

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Buying, selling and trading ProShares Bitcoin Strategy for beginners

What to do before buying shares

You should always take the time to research an ETF fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment. 

With that in mind, here’s a checklist to run through before you start.

  1. Research the investment. You should always examine the basics first. What is Bitcoin ProShares? When did the ETF first become avialable? How long has it been running? Is the Bitcoin performance picking up? Does it own any other assets besides Bitcoin? The more you know about an ETF and its background, the better positioned you’ll be to make smart investment decisions.
  2. Make sure you understand the basics of ETF investing. Before getting involved in the ETF market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
  3. Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
  4. Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
  5. Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our reviews can help you find the right platform.
  6. Examine broader market conditions. No ETF exists in a vacuum, and it’s always important to analyse the general trends of the market as a whole before investing. If a bear market is setting in and prices are falling, it’s best to wait it out and invest your money later when the ETF is cheaper. If, however, the market is looking bullish, you’ll want to make your investment quickly to get the maximum benefit from rising prices. Follow the news to keep on top of movements in the financial markets.

What is the difference between buying, selling, and trading shares?

If you’re new to ETF investing, then it’s important to understand the basics of how to buy, sell, and trade Bitcoin ProShares. Here’s a quick run-through of what’s involved in each.

Buying the ProShares Strategy ETF

This process involves finding a broker and placing an order for the ProShares Bitcoin ETF, as outlined in the steps further up this page. Ideally you want to time your investment when the ETF’s price is low so that you can profit by selling the shares after they increase in value.

Selling the ProShares Strategy ETF

When you sell any shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit. 

When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that the ETF is already up a lot compared to the price you bought it and you’ve noticed that the Bitcoin market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the ETF price has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading the ProShares Strategy ETF

Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade Bitcoin ProShares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on ETF prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

Share dealing vs CFD trading

When it comes to investing in any ETF, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

Share dealing refers to the practice of buying and holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the ETF’s price over time.

When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in an ETF you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.

Pros

  • Can build wealth over time to achieve financial goals
  • Don’t need to be very reactive to short-term market movements
  • Some ETFs will give you an income through regular dividend payments

Cons

  • Takes a long time to realise any profits
  • Your capital is tied up in ETFs and cannot be used for other investments

CFD Trading 

If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. ETF trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of an ETF without having to take ownership of it. When CFD trading, investors are looking to buy and sell ETFs fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into BITO shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading ETF price charts. As you’re trading ETFs quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its ETF price will rise and fall minute-by-minute.

Pros

  • Can generate fast profits if you read the market right 
  • Some platforms allow you to trade with leverage
  • Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

  • Trading with leverage is risky and can lead to big losses
  • Doesn’t necessarily generate growth over the long term

Consider which approach suits you best and craft an investment strategy that works for you. To learn more about taking a short term approach, have a look at our course on day trading.

How to choose a broker

With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:

  • Range of ETFs available. The most important thing is that you can actually use the broker to find the shares you’re looking for. Some brokers offer more ETFs than others, and many will allow you to trade other assets, such as stocks, cryptocurrency, and commodities.
  • Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
  • Regulation. You should only use regulated brokers. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
  • Payment methods available. You might want to fund your trading account using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
  • Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
  • Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.

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Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

James Knight
Lead content editor
When he isn’t at work, James is an avid trader and golfer who likes to travel. He once fed, rode, and ate an ostrich all on… read more.