ProShares Bitcoin Strategy ETF (BITO) Surpasses $1.47 Billion in Assets
The first and largest bitcoin futures ETF, ProShares Bitcoin Strategy ETF (BITO), achieved a significant milestone on Tuesday as its assets under management reached a record high of $1.47 billion. This marks a substantial increase from its launch in October 2021 when it quickly grew above $1 billion in assets, reaching as high as $1.42 billion the following month. However, the fund experienced a decline in assets to about $500 million in November 2022 due to the collapse of the crypto exchange FTX, which led to a decline in bitcoin prices.
BITO’s assets under management stood at $850 million as recently as Oct. 12, but has since seen net inflows of $202 million, according to ETF.com. This surge in assets has also been influenced by market appreciation, as bitcoin’s price has risen by approximately 130% from a year ago, and roughly 9% in the last 30 days, currently standing at about $37,750.
ProShares investment strategist Simeon Hyman stated that BITO’s asset peak reflects the demand for a familiar, accessible, and regulated way to target the returns of bitcoin. The fund’s average daily trading volume of $160 million puts it in the top 5% of all US ETFs, according to Hyman.
Despite BITO’s success, it could soon face competition as industry experts anticipate the US Securities and Exchange Commission (SEC) to approve ETFs that hold bitcoin directly, which would be a first for the regulator. The SEC’s deadline to rule on such a proposal by Ark Invest and 21Shares is Jan. 10, and it is widely believed that the SEC could also greenlight spot bitcoin ETFs from BlackRock, Fidelity, Invesco, and others.
Bloomberg Intelligence analyst Eric Balchunas highlighted that BITO’s increase in assets is interesting considering its potential fate once spot ETFs are introduced. He suggested that while BITO may face some pressure and see some exodus once spot ETFs become available, it is currently being used in anticipation of those ETFs.
Ophelia Snyder, president of 21Shares, also acknowledged the potential impact of spot bitcoin ETFs but believes that futures-based products will still have a role in the market. She stated that there is still a role for futures products to play in the market, albeit a smaller one than what spot ETFs will play.
In summary, BITO’s significant growth in assets demonstrates the increasing demand for bitcoin investment vehicles, but its future success may be influenced by the introduction of new spot bitcoin ETFs.
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