- First Trust has launched two Bitcoin strategy ETFs.
- The two BTC strategy ETFs are FT Vest Bitcoin Strategy Floor15 ETF (BFAP) and FT Vest Bitcoin Strategy & Target Income ETF (DFII).
- The BFAP ETF caps downside risk to 15% while tracking Bitcoin, while the DFII ETF targets 15% annual income via Bitcoin options strategy.
First Trust Advisors, a leading asset management firm, has launched two new Bitcoin strategy exchange-traded funds (ETFs) designed to offer investors structured exposure to Bitcoin (BTC) while managing downside risks and generating yield.
The two ETFs, FT Vest Bitcoin Strategy Floor15 ETF (BFAP) and FT Vest Bitcoin Strategy & Target Income ETF (DFII), were introduced as part of First Trust’s broader Target Outcome ETFs lineup, which has seen rapid growth, reaching over $28 billion in net assets as of February 2025.
These funds are tailored for investors looking to participate in Bitcoin’s price movements while addressing concerns over volatility and risk management.
Notably, the ETFs come at a time when Bitcoin-linked investment products are gaining widespread traction.
With the total assets under management in spot Bitcoin ETFs reaching approximately $93 billion as of April 2025, financial institutions are increasingly looking to introduce structured products that appeal to traditional investors.
The FT Vest Bitcoin Strategy Floor15 ETF
The FT Vest Bitcoin Strategy Floor15 ETF (BFAP) is designed to track Bitcoin’s performance while implementing a protective mechanism that limits potential drawdowns to approximately 15% over a one-year period.
By employing a combination of US Treasury securities, cash equivalents, and option contracts, BFAP seeks to provide investors with a structured outcome that caps the upside potential but offers a defined level of downside protection.
This approach appeals to investors who are interested in Bitcoin’s potential gains but are wary of its notorious price swings.
The FT Vest Bitcoin Strategy & Target Income ETF
On the other hand, FT Vest Bitcoin Strategy & Target Income ETF (DFII) takes a different approach by focusing on income generation.
The DFII ETF is an actively managed ETF that aims to outperform short-dated US Treasurys by at least 15% annually through a strategy centered around selling call options on Bitcoin-linked assets.
By leveraging Bitcoin’s high volatility, DFII generates yield while maintaining partial exposure to Bitcoin’s price movements.
Unlike direct Bitcoin investments, which primarily rely on price appreciation, DFII offers a structured income stream, making it an attractive option for income-seeking investors.
The Bitcoin strategy ETFs offer exposure to BTC without holding
Both funds do not invest directly in Bitcoin. Instead, they gain exposure through Bitcoin-related financial instruments, including options and Bitcoin-linked exchange-traded products (ETPs).
This allows investors to access Bitcoin’s performance without the complexities of directly holding or storing the cryptocurrency.
The structured nature of these ETFs reflects a growing trend among asset managers to offer innovative solutions that mitigate risks associated with cryptocurrency investments.
In the press release circulated to media outlets, Ryan Issakainen, Senior Vice President and ETF Strategist at First Trust, emphasized that these funds cater to investors who have been hesitant to enter the Bitcoin market due to its volatility.
Ryan noted that BFAP provides a mechanism to participate in Bitcoin’s potential gains while addressing concerns about sharp drawdowns.
Similarly, DFII offers a way to capitalize on Bitcoin’s price fluctuations to generate substantial income, an approach that distinguishes it from traditional Bitcoin ETFs.
With these First Trust’s innovative ETFs, investors now have more tools at their disposal to engage with Bitcoin (BTC) in ways that align with their risk tolerance and investment goals.
Credit: Source link
