In 2018, exchange-traded funds oriented on the blockchain-technology would emerge, reports The Motley Fool.
Such companies as ProShares Bitcoin ETF and Short Bitcoin ETF have already applied for the launch of exchange-traded funds. However, despite investors pay much attention to bitcoin funds, the experts warn about the investment risks.
- Bitcoin is an innovation in the modern world. It has a limited operating history.
- The rate of bitcoin is volatile.
- Crypto exchanges are exposed to the high fraud risk.
- Bitcoin can lose its popularity.
- Emerging altcoins can put bitcoin on a back burner of the market.
- Any legal changes in the sphere of bitcoin can have a negative effect on the cryptocurrency.
- The storage of bitcoin can be illegal.
- Financial organizations can stop working with companies that operate with bitcoin.
- Active markets of bitcoin ETF shares might never appear.
- Dynamics of bitcoin futures can lead to poor results of financial funds.
- Exchange-traded funds would find tracking the price of bitcoin an overwhelming task.
- Heavy fees could deplete assets.
- The fund can be closed anytime.
- Courts might not recognize differences between bitcoin ETFs and other funds.
- Natural disasters could prevent the fund from meeting its investment objective.
- Potential cyberattacks pose threat to operational processes.
- Clear regulations of the bitcoin taxation aren’t created.
- Taxes can exceed the revenue from the shares of funds.
- The authorities can present changes to the tax legislation anytime.
- The regulation might limit the operation of funds.
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