Bitcoin Futures ETF Surpasses Half a Billion in Volume in Under Two Hours

The ProShare’s Bitcoin Strategy ETF is the first of its kind and now the biggest fund launch so far in 2021


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key takeaways

  • ProShare’s Bitcoin Strategy ETF made its debut on the NYSE exchange Tuesday
  • In just one hour, it quickly became the biggest fund launch of the year

The first-ever bitcoin futures exchange-traded fund, the ProShares Bitcoin Strategy Fund (BITO) made history in more ways than one Tuesday. The ETF made its debut on the New York Stock Exchange and became the biggest launch of the year in less than an hour. 

“Over $400 million traded already in one hour,” said Jonathan Cheesman, head of over-the-counter and institutional sales at FTX. “Many anticipated public events for bitcoin have been overhyped and sell the fact — 2017 futures launch, Coinbase IPO, Elon on SNL, etc. — but this is a pretty positive start.”

The fund, trading under ticker BITO, opened at $40.88 and rose as much as 5.4% to $42.15 before paring gains. BITO was trading at $40.94 at time of publication. 

Just 20 minutes into the trading session, 6.4 million shares had traded, or roughly $264 million. Volume hit $500 million just after 11:00 am EDT, mostly made up of small trades, Eric Balchunas, ETF analyst at Bloomberg Intelligence pointed out. 

BITO launch

BITO was the most-purchased asset on Fidelity as of 11:32 am EDT with 6,267 buy orders and only 655 sells. 

“I think that the volume is coming from a lot of systematic trading coming from quant-based crypto funds…trying to exploit arbitrage opportunities,” said David Tawil, president of ProChain Capital. “Also, trying to see how much liquidity and depth there is in the market, for purposes of how to trade the shortly forthcoming ETFs.” 

Contrary to some analysts’ original fears, futures are indeed being traded in line with BITO. 

“The spread is penny wide and the price is moving in line with its intraday net asset value (which is good),” Balchunas wrote in a Tweet Tuesday. 

First but not last

While BITO is the first futures-based bitcoin ETF to hit the market, it is not expected to be the last. 

Valkyrie, which recently changed its ETF ticker to BTFD, is due to debut on the Nasdaq Wednesday. Grayscale Investments LLC and the NYSE filed to convert the world’s largest bitcoin exchange-traded product, the Grayscale Bitcoin Trust, into an ETF. This would be a spot product. 

Invesco however withdrew its application for a futures-based ETF hours before ProShares’ launch. 

“We have determined not to pursue the launch of a Bitcoin futures ETF in the immediate near-term; however we will continue to work in partnership with Galaxy Digital to offer investors full shelf of products with exposure to this transformative asset class, including pursuing a physically backed, digital asset ETF,” an Invesco spokesperson said in a statement.

With just under four hours left in the trading session, analysts are wondering if the momentum will be sustained. 

“It is also positive we have held close to Friday’s announcement highs, but we’re not out of the woods with funding pretty elevated,” said Cheesman. 

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