The ProShares Bitcoin Strategy Fund (trading under the ticker BITO), the first Bitcoin futures-backed ETF in history, accrued assets worth $570 million on its first trading day, Coindesk reported. Crypto prices are approaching a record high. BITO, which launched on the New York Stock Exchange on Tuesday, had just $20 million of seed capital at the beginning of the day.
BITO’s first-day trading volume was about $1 billion, ProShares said in a press release. This makes it the ETF with the second-highest transaction value in history on its first day. At the end of the trading day, the fund’s price had reached $41.94, up from the net asset value of $40.
Dave Nadig, chief investment officer and director of research of ETF Trends, told Coindesk in a phone interview:
Much of Tuesday’s trading volume appears to come from retail investors, since there were few large “block” trades of the size that big institutional traders often deal in. This is probably going to be what we all expected, which is it’s an access vehicle for certain players in the marketplace. There’s lots of folks who are active participants in the markets who just don’t want to cross over the crypto bridge by themselves.
A bullish trend for the whole market
Yesterday, Bitcoin was being exchanged at a six-month high. Its price is gradually climbing toward the ATH of almost $65,000 in April. According to Matt Hougan, chief investment officer of Bitwise Asset Management:
The strong first-day showing suggests there is a large amount of capital that is still excluded from the crypto market simply because it’s hard to access. That will change over time, and that capital will enter the market. That’s a pretty bullish signal for the long term.
On Tuesday, Arca Funds CIO Jeff Dorman wrote in a newsletter:
This was a long, arduous road for many, and becomes yet another indication that digital assets are crossing into mainstream.
ProShares ETF won’t introduce new demand for Bitcoin
ProShares’ ETF provides the opportunity to gain exposure to Bitcoin returns with the convenience of purchasing an ETF in a brokerage account. The fund is not structured to invest in Bitcoin directly, but in futures contracts traded on the Chicago Mercantile Exchange.
In itself, the ETF won’t introduce any new demand for the flagship crypto. However, investors might be likely to buy more Bitcoin as they look to benefit from price divergence or protect themselves against the futures price.
