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How does contango affect the price of bitcoin ETFs?

avatarKedarnath SutarNov 28, 2021 · 3 years ago1 answers

Can you explain how contango impacts the price of bitcoin exchange-traded funds (ETFs)?

How does contango affect the price of bitcoin ETFs?
Bitcoin
ETFs
Contango

1 answers

  • avatarNov 28, 2021 · 3 years ago
    Contango can have a significant impact on the price of bitcoin ETFs. When the futures market is in contango, it means that investors are willing to pay a premium for future delivery of bitcoin. This can drive up the price of bitcoin ETFs as they track the price of bitcoin futures. However, it's important to note that contango can also lead to negative returns for bitcoin ETFs over time. As the ETF rolls over its futures contracts, it may have to buy higher-priced contracts, which can eat into its returns. Therefore, investors should be aware of the potential impact of contango when considering investing in bitcoin ETFs.

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