Tag: Proshares’ Bitcoin Strategy Etf

Bitcoin Futures ETF Exceeds Expectations, Trades $1 Billion On Day One

by NEWSBTC

The numbers are in, and the Bitcoin Futures ETF had the biggest debut of the year. By far. We have to “exclude ETFs where their Day One volume was literally one pre-planned giant investor or BYOA,” but that’s fair. Apparently, the ProShares Bitcoin Strategy ETF got to the top naturally, via real trades by real people and institutions. Considering that just its approval by the SEC seemed to catapult Bitcoin’s price to the edge of an All-Time High, a question arises. How will the market react tomorrow? And the day after that?

Related Reading | Bitcoin ETF Check, What’s Next For BTC

But let’s avoid speculation and check Senior ETF Analyst for Bloomberg, Eric Balchunas’ charts:

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Considering the first-ever Bitcoin Futures ETF “also traded more than 99.5% of all ETFs,” it’s fair to say the launch was a huge success. What does it mean for the following ETFs? According to Balchunas, it’ll be hard for them to succeed. “Every day counts because once an ETF gets knows as ‘the one’ and has tons of liquidity, it’s virtually imposs to steal.” And, what does this mean for the market in general? NewsBTC already covered this question:

“Although these ETFs have attracted criticism for being backed by futures contracts and not the underlying asset, they could still have big implications for Bitcoin — allowing tax-sheltered and retirement accounts to easily get exposure, and potentially opening the cryptoasset to a much broader audience.”

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Why Is There A Bitcoin Futures ETF Instead Of A Bitcoin ETF?

Who better to answer this question than the SEC’s chairman himself, Gary Gensler told CNBC: 

“What you have here is a product that’s been overseen for four years by the U.S. federal regulator CFTC, and that’s being wrapped inside of something within our jurisdiction called the Investment Company Act of 1940, so we have some ability to bring it inside of investor protection.” 

So, the Bitcoin Futures ETF falls under the Commodity Futures Trading Commission jurisdiction. Plus, it tracks the Chicago Mercantile Exchange (CME) Bitcoin futures. And the SEC considers that the institutional support will protect the customer. According to them, the underlying asset, Bitcoin, is too volatile and subject to manipulation.

The first persons to propose a Bitcoin ETF in the USA, the Winklevoss twins, lament that when they did the price of Bitcoin was $68 and nowadays is $64K. “That’s almost a 1000x return in the meantime. I’m glad we got here, but it has taken too long.”

Also a skeptic of the Bitcoin Futures ETF‘s long term potential, Anthony Bertolino, VP of growth at iTrustCapital, told CNBC:

“The launch of the first bitcoin-linked ETF in the U.S. will bolster the broader crypto market and help an entirely new investor class experience the benefits of bitcoin as a legitimate asset. However, a derivatives-based bitcoin ETF is not where we want to be long-term.”

BTCUSD price chart for 10/20/2021 - TradingView

BTCUSD price chart for 10/20/2021 - TradingView


BTC price chart for 10/20/2021 on Forexcom | Source: BTC/USD on TradingView.com

What Are The ProShares Bitcoin Strategy ETF’s Characteristics?

The next few days will be crucial for this story. There’s a possibility that today’s demand was orchestrated, at least in part. If this happened, it’ll be very obvious in the following days. In any case, the fund’s official site defines the first Bitcoin Futures ETF as:

“ProShares Bitcoin Strategy ETF (BITO) is the first U.S. bitcoin-linked ETF offering investors an opportunity to gain exposure to bitcoin returns in a convenient, liquid and transparent way. The Fund seeks to provide capital appreciation primarily through managed exposure to bitcoin futures contracts.”

Related Reading | Grayscale Investments Set to File for Bitcoin Spot ETF as Competition Heats Up

And alerts the clients that “The fund does not invest directly in bitcoin,” and that “The price and performance of bitcoin futures should be expected to differ from the current “spot” price of bitcoin.” Forewarned is forearmed.

Featured Image: Screenshot of the ETF's opening bell ceremony| Charts by TradingView

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Bitcoin futures ETF debuts with highest ever first day ‘natural’ volume of $1B

by Cointelegraph

ProShares’ Bitcoin Strategy exchange-traded fund (BITO) saw the highest ever first day “natural” volume for an exchange-traded fund (ETF), with the figure reaching a little over $1 billion by the end of the opening day.

It is second overall, tailing just behind the BlackRock U.S. Carbon Transition Readiness ETF, which booked $1.16 billion in volume on its debut in April.

The ProShares Bitcoin futures-based ETF launched on the New York Stock Exchange on Tuesday with an opening price of $40.88. According to data from TradingView, BITO closed the day at $41.94, with a total of 24.313 million shares changing hands, equating to a first-day volume of just over $1 billion.

Commenting on BITO’s opening day performance, Bloomberg senior ETF analyst Eric Balchunas tweeted that ProShares’ ETF was arguably the largest in terms of “natural” or “grassroots interest.”

Balchunas said BlackRock’s U.S. Carbon Transition Readiness ETF (LCTU) April launch volume was “unnatural,” as it was driven by “one pre-planned giant investor.” LCTU’s daily volume also fell off a cliff to between $2 million and $6 million in the days after launch.

There was reportedly $570 million worth of inflows for BITO on the first day, suggesting that ProShares’ ETF could rank itself as an industry heavyweight in terms of year-one net flows for a first-to-market single commodity ETF in 12 months.

According to data from FactSet, the top two single-commodity ETFs leading the pack are sold and silver, with year-one flows of $3 billion and $1.7 billion, respectively. Outside of commodities, the largest year-one flow for an exchange-traded product of $5.351 billion was for the Invesco QQQ Trust.

While the bullish performance marks a significant milestone for ProShares and the crypto sector, Balchunas warned that it could have consequences for the other firms next in line to launch their own Bitcoin (BTC) futures ETFs:

“The other result of today is it makes life that much harder for the next in line ETFs to succeed. Time is of the essence. Every day counts because once an ETF gets known as ‘the one’ and has tons of liquidity, it’s virtually impossible to steal.”

Related: Buy the rumor… buy the news? BTC price passes $63K as US Bitcoin ETF launches

Following ProShares’ ETF launch on Tuesday, United States Securities and Exchange Commission Chair Gary Gensler outlined in an interview why he and the SEC favor ETFs backed by Bitcoin futures as opposed to the spot price of BTC.

“BTC futures have been overseen by the SEC’s sister agency, the Commodities Futures Trading Commission, for the past four years. You have something that’s been overseen for the past four years by a federal regulator, and it’s also been wrapped up in the SEC’s jurisdiction through the Investment Company Act of 1940,” he said.

Valkyrie’s Bitcoin futures-based ETF is set to be the second product to join BITO on the NYSE this week. It cheekily changed its ticker to BTFD, which is slang for “Buy The F—ing Dip.”