Bitcoin for the crypto hesitant

Six months ago, bitcoin blew even further into the mainstream when the first exchange-traded product tied to it began trading.

It took just two days for the fund, called the ProShares Bitcoin Strategy ETF, to amass more than $1 billion. That’s even though the fund, which often goes by its ticker symbol BITO, doesn’t hold bitcoin itself. It instead invests in futures for bitcoin, a regulated market where traders make bets on where bitcoin is heading in future months.

Michael Sapir, CEO of ProShares, spoke recently with The Associated Press about the fund’s debut.

What do you personally think of crypto? How big a deal will it be, say, 30 years from now?

The truth is no one knows. My view is that in 30 years, cryptocurrencies are either going to be a central part of the financial system and integral to our day-to-day living, or cryptocurrencies will be a distant memory for most people, and their history will be taught at business schools.

Do you personally own any crypto?

I do not personally. But my 15-year-old son does. Within the last six months, he has gotten interested in crypto investing, along with his friends.

Frankly, there’s some of the more esoteric cryptocurrencies that he’s taught me a thing or two on.

The pitch for bitcoin used to be that it would offer protection to an investor’s nest egg, by not always moving up and down in the same direction as stocks and offering diversification. But that hasn’t been the case in recent months. Will that scare people away?

I think you’re right in the very recent past. Bitcoin seems to have correlated with the movements of stocks. I don’t know if that’s a permanent condition. And there’s been substantial periods in the past where bitcoin has performed uncorrelated with stocks and bonds.

There seem to be two types of investors in cryptocurrencies. The first type are long-term holders who believe that the value of cryptocurrency will go up in value and that hopefully it will provide a diversifier for their portfolio. And the second type of investor is a short-term investor who isn’t concerned about whether it’s correlated with another security or whether it’s diversifying a portfolio. They’re trying to take advantage of short-term movements in the cryptocurrency markets.

What kind of people are investing in the fund?

About 16% of Americans have at some point bought a cryptocurrency. We think a large part of the other 84% are intimidated by the prospect of trying to figure out how to get exposure to cryptocurrency and don’t want to open up a special account to do that and then figure out how to hold a cryptocurrency.

Venturing into the cryptocurrency world can be scary and intimidating. We think a big reason for the success of BITO is it took away a lot of those complications and fears.