The first bitcoin futures exchange-traded fund in the United States debuted on Tuesday. The ProShares ETFs offer access to bitcoin futures contracts, which are agreements contracts to buy or sell the asset at a certain price in the future. The launch marks is a watershed moment for the cryptocurrency industry.

What is Bitcoin Futures Exchange-Traded Funds (ETFs)?

The price of one or more underlying assets is tracked by an ETF, which is a publicly traded investment product. The underlying asset in ProShares' case is Bitcoin futures, not Bitcoin itself. Bitcoin futures sold on the Chicago Mercantile Exchange are tracked by the Bitcoin Futures Exchange. For years, crypto companies have tried unsuccessfully to get the SEC to approve bitcoin ETFs. “Futures contracts are financial contracts the value of which depends on, or is derived from, the underlying reference asset,” the filing read. “In the case of Bitcoin Futures, the underlying reference asset is Bitcoin.”

Adding, “Bitcoin and Bitcoin Futures have historically been more volatile than traditional asset classes. You should be prepared to lose your entire investment.”

As of now, investors can buy bitcoin through digital currency exchanges, but there are concerns about safety as many fear losing their private keys, which give access to their assets. Bitcoin trusts are another method for adding bitcoin to portfolios through brokerage or retirement accounts. However, their prices may not reflect the changes in digital currency prices and they may come with higher fees.

As companies await the Securities and Exchange Commission's (SEC) approval to launch regular bitcoin ETFs, bitcoin futures ETFs provide another alternative to what the industry eventually wants - funds that invest directly in digital currency.

Bitcoin has risen sharply in recent weeks, spurred by a possible launch in the US. Last week, the world's most valuable cryptocurrency surged beyond $62,000 for the first time since April. Since it's low in late July, Bitcoin has more than doubled in value.