First Trust Advisors, a leading asset management firm, has introduced two innovative Bitcoin strategy ETFs, providing investors with structured exposure to Bitcoin while managing risks and generating yield. The new funds—FT Vest Bitcoin Strategy Floor15 ETF (BFAP) and FT Vest Bitcoin Strategy & Target Income ETF (DFII)—are part of First Trust’s Target Outcome ETFs series, which now boasts over $28 billion in net assets (as of February 2025).
Key Features of the New Bitcoin ETFs
- BFAP ETF: Caps downside risk at 15% while tracking Bitcoin’s performance.
- DFII ETF: Targets 15% annual income via Bitcoin options strategies.
These ETFs arrive amid surging demand for Bitcoin-linked investment products, with spot Bitcoin ETFs holding ~$93 billion in assets under management (April 2025).
FT Vest Bitcoin Strategy Floor15 ETF (BFAP)
The BFAP ETF combines US Treasuries, cash equivalents, and Bitcoin-linked options to offer:
- Downside Protection: Limits drawdowns to ~15% annually.
- Upside Participation: Tracks Bitcoin’s price movements with capped potential.
Ideal for investors seeking Bitcoin exposure but concerned about volatility.
FT Vest Bitcoin Strategy & Target Income ETF (DFII)
The DFII ETF is an actively managed fund designed to:
- Generate Income: Targets 15% annual yield by selling Bitcoin call options.
- Outperform Short-Dated Treasuries: Leverages Bitcoin’s volatility for premium income.
A compelling choice for income-focused portfolios.
How These ETFs Work
Neither fund holds Bitcoin directly. Instead, they use:
- Bitcoin Options
- Bitcoin-Linked ETPs
This structure simplifies exposure while avoiding custody complexities.
Ryan Issakainen, First Trust’s ETF Strategist, highlights these ETFs as solutions for investors wary of Bitcoin’s volatility but eager to participate in its growth.
👉 Explore Bitcoin investment strategies
FAQs
1. Do these ETFs hold Bitcoin?
No. They gain exposure through derivatives like options and ETPs.
2. What is the primary advantage of BFAP?
Its 15% downside protection mitigates Bitcoin’s notorious volatility.
3. How does DFII generate income?
By selling Bitcoin call options to capitalize on price fluctuations.
4. Are these ETFs suitable for conservative investors?
Yes, their structured outcomes cater to varying risk tolerances.
5. What’s the minimum investment?
ETFs trade like stocks, with no minimum beyond share price.
These ETFs mark a significant step in bridging traditional finance with cryptocurrency markets, offering tailored tools for diverse investment goals.