Proshares Bitcoin Futures Fund Ranks in Top 2% of All ETFs by Volume

Since its launch on October 19, Proshares’ Bitcoin futures exchange-traded fund (ETF) has been a popular choice among traders, ranking in the top 2% of all ETFs by volume in terms of total volume traded.

Bloomberg’s senior ETF analyst Eric Balchunas noted on Nov. 11 that the ProShares Bitcoin Strategy ETF (BITO), which traded $400 million worth of shares yesterday, consistently ranks in the top 2% of all ETFs by average volume.

BITO has seen total inflows of around $112.79 million over the past nine days. While that pales in comparison to the $567.16 million and $489.51 million inflows in the fund's first two days of trading, Baluchunas noted that for newly launched ETFs, "this type of sustained flow is very rare." .

BITO listed on the New York Stock Exchange on October 19 and has since accumulated assets under management (AUM) of over $1.4 billion. Although BITO's price failed to soar and is currently at $42.3, slightly below its initial listing price of around $43.2, investor interest in the fund remains high. Balchunas believes that options trading volume may be the driving factor behind BITO at this stage.

There appears to be little hope for a bitcoin ETF that tracks spot prices to be approved in the near future, with Balchunas saying VanEck's spot ETF will almost certainly be rejected by the U.S. Securities and Exchange Commission (SEC) by the Nov. 14 deadline. Analysts put the odds at a "dismal" 200-1.

The SEC has 100 hours left before they have to approve or reject the VanEck Spot Bitcoin ETF (I guess they will give up after the market closes on Friday, but who knows). While our odds of approval are a dismal 200-1, the denial could provide some clues as to when it will be approved

— Eric Balchunas (@EricBalchunas) November 10, 2021

On Nov. 10, ProShares investment strategist Leks Gerlak told U.S. News & World Report that BITO should have no problem reflecting Bitcoin’s value, as futures contracts play a key role in determining its spot value:

"Bitcoin does not have a single reference price, and the trading price of Bitcoin is different between different exchanges, usually between 1% and 2%, sometimes 4% to 5%. Expert research has found that Bitcoin Futures markets dominate the price discovery process.”

“Bitcoin futures and Bitcoin have historically provided very similar returns over the past few years. Both correlation and beta are very close to Bitcoin,” he added.