America introduced its first Bitcoin Futures ETF a year ago, giving institutional investors an opportunity to invest in bitcoin. The Proshares Bitcoin futures ETF (BITO), which entered the market first, has performed somewhat better than its competitors.
America introduced its first Bitcoin Futures ETF a year ago, giving institutional investors an opportunity to invest in bitcoin. The Proshares Bitcoin futures ETF (BITO), which entered the market first, has performed somewhat better than its competitors.
But since its most recent introduction, the fund has fallen 70%, lagging behind the price of bitcoin. The BITO ETF has received cumulative inflows of more than $1.8 billion over the past year, but is currently down to just $619 million.
However, Bitcoin has been sharply declining ever since the BITO ETF was introduced last year. BITO is one of the worst-timed ETF debuts in history, according to Nate Geraci, head of the advice business The ETF Store. Its introduction almost exactly coincided with the peak in the spot Bitcoin price. The Bitcoin futures curve flattened significantly, decreasing the detrimental effects of rolling contracts every month, which is an advantage of that really poor timing.
The debut of BITO last year marked a turning point for the cryptocurrency industry. With $1.1 billion in AUM, it made its debut as the second-most actively traded Bitcoin fund ever. Operationally, BITO has performed almost flawlessly. Aside from that, BITO only saw two outflows in the past 12 months since its establishment. Since its debut, BITO has only lagged the spot price of Bitcoin by 2%.
But ardent BTC supporters may not exactly be seeking for BITO's ETF! Fans are unable to hold Bitcoins directly with this ETF. As a result, the market for Bitcoin ETF is eagerly anticipated by the sector. The SEC, however, has been systematically rejecting plans, claiming a lack of consumer protection measures.
Regarding BITO, Geraci predicts that in the upcoming months, the performance difference between BITO and the spot BTC price may grow. The fact remains that BITO underperformed, even during a particularly terrible crypto winter, he continued. Expect the futures curve to get steeper and the performance gap between BITO and spot Bitcoin to expand if and when the cryptocurrency market recovers. Meanwhile… Still, there is no spot Bitcoin ETF.
At the time of writing, Bitcoin has a market cap of $372 billion and is trading at $19,397. The current level of open interest in Bitcoin futures points to a price swing to the north.
