On Friday, First Trust closed out the week by launching the FT Vest Bitcoin Strategy Floor15 ETF (BFAP).
For its investors, BFAP seeks to provide capped upside to bitcoin’s price performance, along with downside security. The fund’s net expense ratio currently sits at 90 basis points.
“Over the past few years, investors have shown a remarkably strong appetite for bitcoin-linked ETFs, but the potential for sharp drawdowns has kept many on the sidelines,” noted Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust. “We believe BFAP will be a useful tool for those seeking to participate in a meaningful portion of bitcoin’s potential upside, while also addressing downside risk.”
Tapping Into Bitcoin Through Options
To achieve its investment objectives, the fund invests in options that use the Cboe Bitcoin U.S. ETF Index as its reference assets. Options at play include FLEX Options, standardized listed options, and over-the-counter options.
Through the use of options, BFAP is able to give investors access to returns from bitcoin’s price growth. That being said, the fund does have an upside cap on potential returns. As of April 4th, 2025, that upside cap sits at 34.51% before fees and expenses.
While upside exposure may be subject to a limit, the fund also offers extensive downside security. Across its outcome period, BFAP limits potential losses to 15%, prior to fees and expenses.
Given the relatively volatile nature of bitcoin’s price performance, a risk-adverse bitcoin strategy could pay off in the long term. BFAP can help investors remain engaged in cryptocurrency while hedging against potential volatility.
BFAP is the second bitcoin-focused ETF to join First Trust’s ever-growing lineup. The firm’s first bitcoin ETF, the FT Vest Bitcoin Strategy & Target Income ETF (DFII), actually released earlier this week.
See More: First Trust’s New ETF Offers Bitcoin Option Strategy
First Trust currently has more than 30 ETFs listed in the United States. As a whole, these funds represent about $14 billion in assets under management.
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