IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v102y2025ics1059056025004277.html
   My bibliography  Save this article

Cryptocurrency ETFs vs. nonredeemable investment trusts: An in-depth analysis

Author

Listed:
  • Tang, Hongfei
  • Xie, Kangzhen
  • Xu, Xiaoqing Eleanor

Abstract

As cryptocurrencies continue to dominate fintech innovations and gain wider acceptance, there is an escalating demand for investment vehicles that provide convenient access to these complex digital assets. This study presents a comparative analysis of Exchange-Traded Funds (ETFs) and nonredeemable investment trusts in the context of the cryptocurrency market. Using 1974 daily observations of the Grayscale Bitcoin Trust (GBTC) from May 2015 to March 2023 and 348 daily observations of the ProShares Bitcoin Strategy ETF (BITO) from its inception in October 2021 to March 2023, our results show that non-redeemable trusts can significantly and persistently deviate from their net asset value, while ETFs exhibit better pricing efficiency. Additionally, our analysis reveals that the Bitcoin ETF has superior tracking performance and faster correction of mispricing compared to the nonredeemable Bitcoin investment trust. Our study offers novel empirical insights into the inefficiencies of nonredeemable investment trusts, identifies the drivers of valuation premiums and discounts, and provides empirical support for the notion that ETFs offer a more efficient and effective cryptocurrency investment vehicle. These findings have important implications for investors, portfolio managers, and policymakers.

Suggested Citation

  • Tang, Hongfei & Xie, Kangzhen & Xu, Xiaoqing Eleanor, 2025. "Cryptocurrency ETFs vs. nonredeemable investment trusts: An in-depth analysis," International Review of Economics & Finance, Elsevier, vol. 102(C).
  • Handle: RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025004277
    DOI: 10.1016/j.iref.2025.104264
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056025004277
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.iref.2025.104264?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025004277. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.