Mogo: what is a Bitcoin ETF?

What is a Bitcoin ETF?

And why should I care?

There was some big news on the Bitcoin front this week!

First, we just launched green bitcoins, the world’s first climate-friendly way of trading bitcoin. For every bitcoin bought on our platform, we will offset enough trees to make that bitcoin completely climate positive – and more.

Mining a Bitcoin produces around 421,000 pounds of CO2. When you buy bitcoins from us, we plant trees that can soak up 500,000 pounds of CO2 over their lifetime to offset all of the bitcoins traded on our platform. That makes your investment in the crypto climate positive. Do you want in?

But enough about us! (Joke, we’ll probably talk more about ourselves later.)

The other big bitcoin news this week is the first time it is trading with a Bitcoin Exchange Traded Fund (ETF). Why is this important and how can it affect you? We tell you

What is a Bitcoin ETF?

A Bitcoin ETF is a very first fund of its kind to be traded on the stock exchange. This ETF, ProShares Bitcoin Strategy ETF (Ticker: BITO), tracks the price of Bitcoin. So if the price of Bitcoin goes up, the value of BITO will go up too. When Bitcoin fills up, so will BITO.

Before we go any further, you should know: We’re talking a lot about BITO in this article because it’s the very first of its kind – but you should know that that doesn’t mean we endorse or support BITO. Anytime you decide to invest, you will need to do your own independent research to ensure that each investment is right for you.

ETFs can be very powerful tools for investors. They can track a single asset or a basket of assets and allow investors to diversify their portfolios without actually buying and owning the assets that the ETFs track.

This is the crux: BITO enables investors to buy into the ETF without buying Bitcoin themselves.

This is big news because BITO is the first of its kind. It’s also big news because it had estimated sales of $ 1 billion on its first day of trading. This makes it the second highest debut trading day of all time, surpassed only by a BlackRock carbon fund.

What does this high turnover mean? It could mean that people are interested.

How is a Bitcoin ETF different from Bitcoin?

The biggest difference between BITO and Bitcoin is that BITO is not a cryptocurrency; it’s not a bitcoin.

Bitcoin is a cryptocurrency that operates on the blockchain, where coins can be bought, sold, used for transactions, given away or donated via certain platforms. You need to keep your bitcoin in a very safe place, e.g. B. in a cryptocurrency wallet.

The Bitcoin ETF is a completely different financial instrument. The ETF is not bought or sold on the blockchain; Rather, it is traded on exchanges such as the New York Stock Exchange. Instead of using a platform and specially designed crypto wallet, you can just use your regular stock trading app or ask your broker to do the shopping for you.

BITO may be of interest to many because to many it appears to be a simpler tool. It can allow buyers to bypass the security procedures and storage requirements that come with buying real Bitcoin.

The ETF also means investors can potentially sell their stocks short if the price of BTC appears to be falling.

Should I invest in a Bitcoin ETF?

Whether or not you should buy Bitcoin, BITO, or neither depends entirely on your investment needs, risk tolerance and strategies.

If you’re looking for a way to measure the performance of Bitcoin (it’s the top performing asset in the last decade, according to a March 2021 study, for your information only) but are hesitant to buy and sell (and store) cryptocurrency, an ETF might be right for you. Note, however, that you may incur trading and management fees.

When you’ve done your research and decided to dig into Bitcoin, you can easily buy and sell Bitcoin on our platform for a small fee

And if you are environmentally conscious, you can buy bitcoin with Mogo. With our green Bitcoin, your investment can actually have a net positive effect on the climate. Serious. You can invest as little as CAD 1.00 and at the end of the day you will have some satoshis (small amounts of Bitcoin) and a tree to be planted in your honor. Cool!

Finally, if all of this jargon seems like a lot of nonsense to you, then don’t worry about either option!

Green bitcoin revolution

A serious obstacle to widespread acceptance of cryptocurrency (especially Bitcoin!) Is the environmental factor. Every year BTC uses as much energy as a small country like Sweden – including the daily life of its 10 million plus inhabitants. By committing to full carbon offsetting (and more), we are able to keep all bitcoins purchased through our platform positive.

That said, if you decide to invest in Bitcoin, you can do so and feel good about helping the planet.

What use is all of this when the world is on fire?

We look forward to seeing you in the future of Bitcoin. Register here and let’s go!

This blog is for informational purposes only and is not intended as investment advice and is not intended to suggest that any particular investment or strategy is suitable for any particular investor. If you are unsure about an installation, you can get advice from a qualified professional. Nothing herein should be construed as an offer, solicitation of an offer, or advice to buy or sell any security. Buying and selling Bitcoin is risky and you can suffer losses. Bitcoin’s price is very volatile and speculative, so you should never invest more in Bitcoin than you can afford to lose. It’s also important to remember that past performance is not a guarantee of future results. Mogo will offset the approximate carbon footprint created by mining the maximum total number of bitcoins held on its platform at any given time (as determined from time to time).

1-The exchange rate that we offer you for a buy or sell transaction of cryptocurrency is calculated from the price of our exchange partner, which may include fees or surcharges imposed by our exchange partner and / or other factors such as market depth and volatility, and includes one of us charge of 1%. You can check the exchange rates that we offer for buying and selling cryptocurrencies at any time in MogoAccount.


Disclaimer of liability

Mogo Inc. published this content on November 16, 2021 and is solely responsible for the information contained therein. Distributed by public, unedited and unchanged, on November 17, 2021 7:20:03 PM UTC.

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