Bitcoin Futures ETF Records $1 Billion in Trading Debut

October 21, 2021, 9:15 AM AEST - 2 months ago

The first US-based Bitcoin exchange-traded fund (ETF) has finally listed and surpassed all expectations. ProShares Bitcoin Strategy ETF, trading under the ticker $BITO, recorded a historic US$1 billion in its first day of trading, easily the biggest day one of any ETF in terms of ‘natural’ volume.

 

Since ProShares’s Bitcoin (BTC) futures ETF listed on the New York Stock Exchange on October 19, it has been met with explosive interest. The news comes soon after Jacobi Asset Management, a London-based multi-asset investment manager, announced it had received approval to launch the first European Bitcoin ETF.

Biggest Day One Recorded

$BITO has had the biggest first day in terms of ‘natural’ trading volume and has also traded more than 99.5 percent of all ETFs, according to Bloomberg ETF correspondent Eric Balchunas.

Futures, and Not Spot ETF

Interestingly, $BITO listed on the New York Stock Exchange, not after approval from the US Securities and Exchange Commission (SEC) but rather due to the SEC’s lack of objection within 75 days of the initial application.

$BITO will not provide any direct exposure to the BTC spot price. In usual instances, when you buy a regular ETF, the value of the share is based on the price of the asset underlying the fund. However, in the case of a futures ETF, a number of additional factors may lead to the price of the shares diverging from the asset.

The narrative surrounding ETFs has always been that if granted, a Bitcoin ETF would open the door for many new participants who are otherwise not interested, nor able to navigate the complexities of entering the world of cryptos. Accordingly, an ETF would then expose institutional and retail investors to BTC in a simple, trusted and familiar way.

Moving in the Right Direction

Although $BITO or any other futures-based ETF will not entirely allow for the traditional narrative of ETFs, it is certainly a step in the right direction. While $BITO does give BTC more recognition and credibility, it has been suggested that the futures-based ETF will ultimately act as a bridge for others to launch spot market-based ETFs.

Following the launch of the ProShares ETF, it has been reported that Valkyrie Bitcoin Strategy ETF may also commence trading early next week. As all eyes are on the company, most focus has however been on Twitter as the ETF’s ticker symbol, in an apparent nod to the community, changed from $BTF to $BTFD, or ‘buy the f*cking dip’.

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