The biggest bitcoin futures ETF hits $2B AUM ahead of spot BTC fund decision

The largest bitcoin futures ETF’s asset base continues to climb in the days ahead of a possible milestone approval of US funds that directly hold BTC.

The ProShares Bitcoin Strategy ETF (BITO) approached $2 billion in assets under management on Monday.

BITO launched in October 2021, becoming the first US fund of its kind. In the absence of ETFs that hold bitcoin directly, products that invest in bitcoin futures were thought to be the next best thing. BITO reached $1 billion in assets just days after hitting the market.

The fund’s asset base shrunk to roughly $500 million in November 2022 amid the collapse of crypto exchange FTX. But BITO has seen major inflows in recent months, thanks to a bitcoin rally in part attributed to optimism around spot bitcoin ETF approval.

BITO notched net inflows of $506 million in 2023 and saw an additional $30 million of inflows during the first eight days of 2024, according to ETF.com data.

Trading volumes for the fund hit more than 35 million shares on Monday, according to Yahoo Finance — worth roughly $800 million.

“We believe this speaks to the demand for a familiar, accessible and regulated way to target the returns of bitcoin,” ProShares Investment Strategist Simeon Hyman said Tuesday.

Fate of BITO uncertain if spot bitcoin ETFs approved

Despite BITO’s growing assets, the fund could soon have competition from spot bitcoin ETFs. The Securities and Exchange Commission is expected to rule on those types of funds by Wednesday.

Bloomberg Intelligence analyst Eric Balchunas said in November that BITO could be “under pressure” if and when spot bitcoin ETFs hit the market, adding that “people prefer those.”

21Shares president Ophelia Snyder noted during a Bloomberg TV interview at the time that while she believes spot bitcoin ETFs have “broader appeal,” she expects futures-based products to have “a smaller role” for certain investors.

Hyman also took to Bloomberg TV last week, calling the bitcoin futures market “mature, liquid and regulated,” adding: “There are a lot of things we don’t know about the spot market.”

Inflows into digital asset investment products totaled $151 million during the first week of 2024, according to CoinShares. ProShares led all issuers in the net inflow category during that span with inflows of $72 million.

“If many truly believed that [the] launch of the ETF in the US would [be] a ‘buy the rumor, sell the news’ event, we surely would expect to see inflows into short bitcoin [exchange-traded products],” CoinShares research head James Butterfill wrote in a Monday report. “Instead, outflows over the last nine weeks have amounted to [$7 million].”

Get the news in your inbox. Explore Blockworks newsletters:

The Breakdown: Decoding crypto and the markets. Daily.
Empire: Crypto news and analysis to start your day.
Forward Guidance: The intersection of crypto, macro and policy.
0xResearch: Alpha directly in your inbox.
Lightspeed: All things Solana.
The Drop: Apps, games, memes and more.
Supply Shock: Bitcoin, bitcoin, bitcoin.