How to capitalize on Bitcoin ETFs with the help of crypto trading bots

Photo by Behnam Norouzi on Unsplash.

The crypto community is currently awash in excitement and hype over Bitcoin Spot ETFs after they were approved in the US.

Exchange-traded funds (ETFs) are often touted as a way for investors to get exposure to Bitcoin without holding actual Bitcoin themselves. And now the SEC has opened the door to Bitcoin trading for millions of people.

The Securities and Exchange Commission approved a swath of different Bitcoin Spot ETFs, most of which began trading the next day.

It wasn't a bad day for those ETFs either – reportedly, trading volumes were over four and a half billion in USD terms on just the first day. Their success or failure is, of course, a story that remains to be seen. Undoubtedly, though, people want Bitcoin, and the release and performance of the ETFs are further proof of that.

Traders looking to capitalize on this new asset class can use AI-based crypto trading bots to support their strategies.

What is a Bitcoin ETF?

A Bitcoin ETF functions just like any other ETF, allowing investors to interact with the cryptocurrency market without directly owning Bitcoin. This is exactly how a fund or stock exchange operates.

An asset management company purchases and stores the underlying asset with a custodian. Then, it issues shares to its fund that investors can buy and sell. The financial institution is responsible for managing the underlying asset (in this case, Bitcoin) for safekeeping on behalf of the fund’s investors.

The goal is to increase market volume by attracting larger and more varied investors (in particular institutional investors) and create a more stable buying and selling experience overall.

A sanctioned product like a Bitcoin ETF will signal stability and trust in the cryptocurrency market. This, in turn, will likely attract institutional investors who have been keeping their distance from this highly volatile asset. Not to mention, the influx of capital could drive the price of Bitcoin much higher in the years ahead.

What are the benefits of Bitcoin ETFs?

Spot Bitcoin ETFs eliminate the headache of managing multiple accounts since traders don’t have to purchase or store Bitcoin assets.

Spot Bitcoin ETFs make it possible to add Bitcoin exposure to existing brokerage accounts. That convenience is why spot Bitcoin ETFs could drive BTC’s price even higher.

The downsides of Bitcoin ETFs

The main downside of Bitcoin ETFs is fees.

As mentioned, the SEC has approved 11 spot Bitcoin ETFs, but fees vary widely between certain funds.

• Bitwise Bitcoin ETF Trust (NYSEMKT: BITB): 0.20%
• Ark 21Shares Bitcoin ETF(NYSEMKT: ARKB): 0.21%
• Fidelity Wise Origin Bitcoin Fund (NYSEMKT: FBTC): 0.25%
• iShares Bitcoin Trust (NASDAQ: IBIT): 0.25%
• Valkyrie Bitcoin Fund (NASDAQ: BRRR): 0.25%
• VanEck Bitcoin Trust (NYSEMKT: HODL): 0.25%
• Franklin Templeton Digital Trust (NYSEMKT: EZBC): 0.29%
• WisdomTree Bitcoin Trust (NYSEMKT: BTCW): 0.3%
• Invesco Galaxy Bitcoin ETF (BATS-CHIXE: BTCO): 0.39%
• Hashdex Bitcoin ETF (NYSEMKT: DEFI): 0.94%
• Grayscale Bitcoin Trust(NYSEMKT: GBTC): 1.5%

The Grayscale Bitcoin Trust charges a 1.5% transaction fee. This means that investors would pay $15 annually for every $1,000 invested.

Another thing to consider is the insurer of the ETF. Bitcoin ETFs run by larger asset managers may be less prone to liquidity problems arising from insufficient demand.

Grayscale, for instance, is the largest Bitcoin fund with a 10-year track record and has a diversified investor base. So, naturally, it will attract a stronger demand.

How to leverage crypto trading bots to trade Bitcoin ETFs.

Cryptocurrency trading bots can support the trading of spot Bitcoin ETFs by integrating with the relevant exchange platforms that offer these ETFs. They can analyze market data, execute trades, and manage risk based on predefined criteria.

Additionally, these bots can provide real-time monitoring of ETF prices, liquidity, and market trends to make informed trading decisions.

Here are some of the ways algorithmic tools can help support ETF trading.

Diversify your portfolio

We predict that Bitcoin ETFs will provide access to price shifts on Bitcoin futures. However, crypto market exposure will be limited. That’s where crypto trading bots come into play. These tools can allow you to benefit from automated trading on a broad range of cryptocurrencies, including Bitcoin ETFs.

Refonte Infini enables the trading of established crypto assets and up-and-coming altcoins in the market. This is one of the ways for Bitcoin ETF traders to mitigate risks with a diverse portfolio and benefit from such opportunities.

Mitigate risks

Any time a trader dips a toe into crypto waters, they are exposed to a high-risk environment. While trading a Bitcoin ETF is inherently lower risk, the sophisticated crypto trading bots provide an array of tools to mitigate risks. These include measures like stop and limit orders, caps on the percentage of a balance that can be allocated to a single trade, and hedging.

With Refonte Infini, there is also a human risk management team monitoring the algorithm 24/7. This means we can intervene in the case of an extreme market event or technical hitch.

Also, Refonte Infini’s AI capabilities mean it is continuously learning from its experiences. It is constantly refining its risk management parameters based on the data it ingests, the positions it opens and its interactions with users.

High-frequency trading

One of the biggest advantages of using a crypto trading bot to trade Bitcoin ETFs and other assets is that it can execute trades with speed. And the overall efficiency is unmatched.

Refonte Infini Scientific Trading Bots are trained on a massive array of data sources. These include on-chain data, economic news, social media feeds, financial reports, and historical price data.

Working at lightning-fast speeds, the algorithms process and analyze a wealth of real-time data. They can also respond to short-term price fluctuations in a fraction of a second to generate profits across numerous markets simultaneously.

Minimized costs

Refonte Infini makes institutional-grade AI trading bots widely accessible. Users can benefit from trading the Bitcoin ETFs and a wide selection of other assets. There are plans tailored to individual user needs, ranging from a free plan to premium options.

Bottom line: Start trading Spot Bitcoin ETFs

The main priority for crypto traders is always going to be profits. The ability of crypto trading bots to execute a huge volume of trades simultaneously makes it possible to make more deals than manually. You can use Refonte Infini trading bots to monitor Bitcoin ETF prices, analyze the market, execute trades and even mitigate risks.