ProShares Bitcoin Strategy ETF

Bitcoin exposure through CME Bitcoin futures contracts. The first Bitcoin-linked ETF approved in the U.S. (2021). Does NOT hold spot Bitcoin.

Why This Week?

BITO is a cautionary tale and an educational case study. As the first Bitcoin ETF (2021), it was revolutionary — but the arrival of spot Bitcoin ETFs in 2024 (IBIT, FBTC) exposed its structural weaknesses: high fees (0.95%), futures roll costs, and tracking drag. Down ~30% YTD in 2026's crypto winter while its AUM shrinks as capital migrates to spot alternatives, BITO illustrates why understanding fund structure matters as much as understanding the underlying asset. It's a lesson in how innovation in financial products can make first-movers obsolete.

Key Metrics

YTD Return

~-30%

1Y Return

~-41%

3Y Annualized

~25%

Expense Ratio

0.95%

Dividend Yield

~1.8%

AUM

$1.4B

Top Holdings

3 holdings shown. Weights are approximate.

#NameWeight

BTC FuturesCME Bitcoin Futures (front month)

~92%

COIN FuturesCoinbase Bitcoin Futures

~4%

SwapBitcoin Futures Index Swap

~4%

Pros & Cons

Strengths

First-mover: pioneer Bitcoin ETF with established track record since 2021
Potential 60/40 tax treatment on futures-based gains under U.S. tax law
Regulated under the Investment Company Act of 1940 — stronger protections
Monthly dividend distributions (though highly variable)
Accessible through any standard brokerage account — no crypto wallet needed

Risks & Weaknesses

Very high expense ratio (0.95%) — nearly 4x the cost of spot Bitcoin ETFs (0.25%)
Futures roll costs and contango drag erode long-term returns vs spot Bitcoin
Severe YTD decline (~-30%) during 2026's crypto winter
Significantly outcompeted by spot Bitcoin ETFs (IBIT, FBTC) in cost and tracking
Shrinking AUM ($1.4B) as capital flows to spot alternatives
Does NOT hold actual Bitcoin — indirect exposure through derivatives

Alternatives Comparison

ETF	Name	TER	Focus
BITOThis Week	ProShares Bitcoin Strategy ETF	0.95%	Bitcoin exposure through CME Bitcoin futures contracts. The first Bitcoin-linked ETF approved in the U.S. (2021). Does NOT hold spot Bitcoin.
IBIT	iShares Bitcoin Trust (BlackRock)	0.25%	Spot Bitcoin ETF holding actual Bitcoin, much lower cost, better tracking
FBTC	Fidelity Wise Origin Bitcoin Fund	0.25%	Spot Bitcoin ETF with Fidelity Digital Assets custody
ARKB	ARK 21Shares Bitcoin ETF	0.21%	Lowest-cost spot Bitcoin ETF among major issuers

💬 Frequently Asked Questions

Bitcoin is in a prolonged bear market / crypto winter in 2026. Additionally, BITO's futures-based structure compounds losses through roll costs and contango, causing it to underperform even spot Bitcoin during downturns.

The primary reasons are: (1) potential 60/40 tax treatment on futures-based ETFs under U.S. tax law, (2) regulation under the 1940 Act providing additional investor protections, and (3) legacy positions from before spot ETFs were available. For most new investors, spot Bitcoin ETFs are generally preferred.

BITO must continuously sell expiring Bitcoin futures contracts and buy new ones ('rolling'). When futures trade at a premium to spot price (contango), this process costs money and creates a performance drag that compounds over time. This is why BITO consistently underperforms the actual price of Bitcoin.

The trailing TTM yields shown on some platforms (60-70%) are misleading — they reflect past capital gains distributions, not true income. The forward dividend yield is approximately 1.8-2.0%. Monthly distributions fluctuate significantly.

For most long-term investors, spot Bitcoin ETFs (IBIT, FBTC) offer lower costs (0.25% vs 0.95%), better tracking of Bitcoin's actual price, and no roll-cost drag. However, switching may trigger taxable events, so consult a tax advisor first.

BITO has been trading since October 2021, providing nearly 5 years of data for backtesting. You can use our backtester to compare BITO against traditional assets, see its correlation behavior, and understand its risk characteristics.

Want to Explore Further?

BITO launched recently, so try backtesting SMH or SOXX as semiconductor proxies, or explore our ETF database for alternatives.

Backtest SMH + SOXX ETF Explorer

Disclaimer: ETF of the Week is educational content only. It is not investment advice, a recommendation to buy or sell, or an endorsement of any fund. Past performance does not guarantee future results. Always do your own research and consult a financial advisor before investing.