If you’re dipping your toes into the world of cryptocurrency investments, you’ve probably heard a lot about Bitcoin. It’s the king of digital assets, right? But buying actual Bitcoin can feel intimidating with all the wallets, exchanges, and security worries.
That’s where something like BITO comes in. BITO, or the ProShares Bitcoin Strategy ETF, has been making waves since it launched back in 2021.
It’s designed to give you exposure to Bitcoin’s price movements without the hassle of owning the crypto itself. But the big question on everyone’s mind is: Is BITO a good investment in 2025?
What is BITO Exactly?
BITO stands for ProShares Bitcoin Strategy ETF, and it’s essentially a fund that tracks Bitcoin’s performance through futures contracts. Launched on October 18, 2021, it was the first Bitcoin-linked ETF available in the U.S.
This means you can buy shares of BITO just like any stock through your regular brokerage account, no need for a crypto exchange or dealing with private keys.
The goal of BITO is simple: to mirror the ups and downs of Bitcoin’s price as closely as possible. But here’s the key twist, BITO doesn’t actually hold Bitcoin. Instead, it invests in Bitcoin futures, which are agreements to buy or sell Bitcoin at a future date.
These futures are traded on regulated exchanges like the Chicago Mercantile Exchange (CME). This setup makes it more accessible for traditional investors who want Bitcoin exposure without jumping into the wild west of crypto trading.
Why does this matter? Well, with Bitcoin’s price soaring in recent years, hitting new highs in 2024 and continuing momentum into 2025. Many folks are looking for safer ways to ride that wave.
BITO offers that bridge between the stock market and crypto, with shares trading under the ticker BITO on the NYSE Arca.
As of early September 2025, its net asset value (NAV) hovers around $19.32, and it’s got over $2.6 billion in assets under management. Not too shabby for a fund that’s been around for just a few years.
How Does BITO Work?
At its core, BITO is an actively managed ETF. The folks at ProShares handle the investments, primarily buying Bitcoin futures contracts that expire in the near term.
To keep the fund aligned with Bitcoin’s spot price (the current market price), they “roll” these contracts, selling the expiring ones and buying new ones for the next month.
This rolling process is crucial, but it can sometimes lead to slight differences in performance compared to actual Bitcoin.
You might also hear about swaps and other derivatives in the mix. These help fine-tune the exposure. Plus, BITO can distribute income monthly from things like futures premiums, which has led to some impressive yields.
For instance, its trailing 12-month yield is sitting at a whopping 57% as of recent data. That’s like getting paid to hold onto your investment while Bitcoin does its thing.
Trading BITO is as easy as buying Apple or Tesla stock. You can do it during market hours, and it even has options available for more advanced strategies.
The expense ratio is 0.95%, which covers management fees, a bit higher than your average stock ETF, but reasonable for the crypto angle.
Just remember, past performance isn’t a guarantee, and Bitcoin’s volatility means your investment could swing wildly.
The Pros of Investing in BITO
Let’s talk about why BITO might appeal to you. It’s not perfect, but it has some solid advantages, especially if you’re easing into crypto.
- Ease of Access: No crypto wallet or exchange account required. Just use your existing brokerage like Vanguard or Fidelity. This lowers the barrier for beginners who don’t want to deal with hacks or lost passwords.
- Regulated and Transparent: As an ETF, it’s overseen by the SEC, offering more protection than direct crypto buys. You get daily pricing, clear holdings reports, and liquidity from trading on major exchanges.
- High Yield Potential: BITO pays monthly dividends, often from futures income. With yields over 50% annually in recent periods, it’s a draw for income-focused investors. Imagine getting $1.11 per share monthly—that adds up quickly.
- Diversification Tool: Adding BITO to a stock-heavy portfolio can hedge against inflation or traditional market dips, since Bitcoin often moves independently.
- Liquidity and Trading Volume: BITO trades millions of shares daily, making it easy to buy or sell without big price impacts. It’s in the top 5% of U.S. ETFs for volume.
These perks make BITO a convenient way to get Bitcoin exposure, especially if you’re risk-tolerant and value that monthly payout.
The Cons and Risks You Should Know
Of course, no investment is all sunshine. BITO comes with its share of challenges, mainly tied to Bitcoin’s nature and the futures structure.
- High Volatility: Bitcoin’s price can rocket up or crash down fast. BITO mirrors this, so you could see 20-30% swings in a month. If you’re not comfortable with that, look elsewhere.
- Tracking Error from Futures: Because it uses futures, not spot Bitcoin, performance might lag due to “contango” (when future prices are higher than spot, leading to roll costs). Over time, this can erode returns compared to holding actual Bitcoin.
- Fees Eat into Gains: That 0.95% expense ratio adds up, especially long-term. Direct Bitcoin holding has zero ongoing fees once bought.
- No Actual Ownership: You don’t own Bitcoin, so you miss out on using it for transactions or staking. Plus, in a regulatory shift favoring spot ETFs, futures-based ones like BITO might underperform.
- Market and Regulatory Risks: Crypto is still evolving. Government crackdowns, fraud, or manipulation could tank prices. BITO is non-diversified, so one bad Bitcoin day hits hard.
In short, while BITO simplifies things, it’s still a high-risk play. Always consider your tolerance for loss, Bitcoin-linked investments can go to zero.
BITO’s Performance So Far
Looking at the numbers helps paint a picture. BITO has had a rollercoaster ride since inception, but it’s generally tracked Bitcoin’s bull runs well.
Here’s a quick table of its total returns (based on NAV, as of September 8, 2025):
| Period | NAV Return (%) | Market Price Return (%) | Notes |
|---|---|---|---|
| YTD 2025 | 20.66 | 20.76 | Solid gains amid Bitcoin’s rally |
| 1 Month | 8.03 | 8.13 | Recent uptick |
| 3 Months | 22.30 | 22.44 | Strong summer performance |
| 6 Months | 11.80 | 11.87 | Mixed due to mid-year dips |
| 1 Year | 69.02 | 69.26 | Impressive annual growth |
| 3 Years | 60.59 | 60.54 | Annualized around 17% |
| Since Inception (2021) | 11.95 | 11.97 | Reflects crypto’s volatility |
These figures include dividends, which boost the total return. For 2025 predictions, analysts see BITO potentially hitting a high of $27.28, with an average around $24.
But remember, forecasts are guesses, Bitcoin’s history shows wild surprises. In 2024, BITO returned over 64%, but earlier years had losses like -59% in 2022.
BITO vs. Direct Bitcoin Investment
Wondering if BITO beats buying Bitcoin outright? It depends on your style. Direct investment means purchasing Bitcoin on exchanges like Coinbase and holding it in a wallet.
Here’s a simple comparison table:
| Aspect | BITO (Futures ETF) | Direct Bitcoin Investment |
|---|---|---|
| Ownership | No actual Bitcoin; tracks via futures | You own the asset directly |
| Fees | 0.95% annual expense ratio | Transaction fees only (0.1-1%) |
| Accessibility | Brokerage account, easy trading | Needs exchange and wallet setup |
| Risk Management | Regulated, but futures roll costs | Security risks (hacks, loss) |
| Income Potential | Monthly dividends (up to 57% yield) | None, unless you stake/lend |
| Tracking Accuracy | Close but with potential lag | Exact match to spot price |
| Long-Term Cost | Fees compound over time | Cheaper for buy-and-hold |
BITO shines for convenience and income, but direct holding might edge out for pure price appreciation. Spot Bitcoin ETFs (approved in 2024) are closer rivals to direct buys, offering better tracking without futures issues.
Is BITO Right for You?
Ultimately, whether BITO is a good investment boils down to your goals and risk appetite.
If you’re seeking a hands-off way to tap into Bitcoin’s growth with some dividend income, and you have a diversified portfolio, it could be a yes.
It’s great for intermediate investors who want crypto exposure without the tech headaches.
But if you’re ultra-conservative or planning a long hold without income needs, direct Bitcoin or spot ETFs might suit better.
Consider your timeline too. For short-term trades, BITO’s liquidity is a plus. For retirement? Pair it with stable assets to balance the volatility.
Always do your due diligence and maybe chat with a financial advisor.
FAQs About Is BITO a Good Investment
Q. What is the current yield on BITO?
As of mid-2025, BITO’s trailing 12-month yield is around 57%, paid monthly. This comes from futures premiums, but it can fluctuate with market conditions.
Q. Can BITO lose all its value?
Yes, like any Bitcoin-linked investment, BITO could drop to zero if Bitcoin crashes dramatically. Its value is tied to volatile crypto markets, so it’s not for the faint-hearted.
Q. How does BITO compare to spot Bitcoin ETFs?
Spot ETFs hold actual Bitcoin for tighter tracking, while BITO uses futures, which might cause slight underperformance due to rolling costs. Spot ones have lower fees but no monthly dividends like BITO.
Conclusion
BITO offers an exciting entry into Bitcoin investing with its ease and income perks, but it’s not without risks. If 2025’s predictions hold, it could deliver strong returns, just weigh the volatility carefully.
Disclaimer: This isn’t financial advice; investments involve risk, and you could lose money. Consult a professional before diving in, and always invest what you can afford to lose.
Anurag is a personal finance blogger dedicated to helping readers take control of their money and build long-term financial freedom. Through practical insights on budgeting, investing, and smart money habits, he simplifies complex financial concepts for everyday people.