In an exciting development for the cryptocurrency market, the ProShares Bitcoin Strategy ETF (BITO) has once again crossed the $1 billion mark. Bloomberg Senior ETF Analyst Eric Balchunas shared this news on his Twitter account on June 25th, highlighting the significant achievement for the first Bitcoin futures ETF launched in the United States.
According to Balchunas, BITO experienced its largest weekly inflow in a year, with assets once again surpassing $1 billion. The ETF also saw remarkable trading activity, with a staggering half a billion dollars’ worth of shares traded on Friday alone. This level of trading volume indicates that BITO’s performance is closely tracking that of Bitcoin itself, which is of great interest to investors.
The ProShares Bitcoin Strategy ETF, launched by asset management company ProShares in October 2021, faced a challenging period since its inception. After a promising start, BITO experienced a significant decline of 70% within a year. Despite this setback, the ETF managed to maintain net inflows of $1.8 billion in its first year. However, it also suffered a loss of approximately $1.2 billion, causing its total assets to dwindle to $624 million.
Interestingly, despite the crypto market experiencing a prolonged bearish phase, BITO continued to attract investors, and withdrawals remained minimal. The resilience of the ETF’s asset inflows during the crypto winter demonstrates the sustained confidence in the potential of cryptocurrencies, particularly Bitcoin.
One important factor contributing to the marketability of an ETF is its ability to closely track the price movements of the underlying asset. In the case of BITO, the difference between its market price and the spot price of Bitcoin stands at around 2%. This indicates that the ETF is relatively faithful in mirroring the performance of Bitcoin, further enhancing its appeal to investors seeking exposure to the digital currency.
Eric Balchunas also pointed out an interesting observation regarding the costs associated with BITO. Despite concerns about futures roll costs impacting the ETF’s performance, the discrepancy between the fees and the roll costs is marginal. BITO’s annual fee is 0.95%, while the additional roll costs amount to approximately 10 basis points. This suggests that the roll costs account for only a small portion of the ETF’s overall expenses and can be considered negligible.
The recent achievement of the ProShares Bitcoin Strategy ETF in crossing the $1 billion mark once again is a significant milestone for the cryptocurrency industry. It highlights the growing demand for Bitcoin exposure in the form of ETFs and demonstrates investors’ confidence in the potential of digital assets. As the cryptocurrency market continues to evolve, ETFs like BITO are playing a crucial role in providing accessible avenues for investors to participate in this emerging asset class.
Source: https://azcoinnews.com/proshares-bitcoin-strategy-etf-bito-surpasses-1-billion-mark-again-reflecting-strong-investor-interest.html