ProShares’ BITO Sees Largest Inflow Amid Bitcoin ETF Hype

Jimmy Aki
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Institutional investors have rekindled their interest in Bitcoin futures, leading to a significant weekly influx of $65 million into ProShares’ BITO Bitcoin ETF.

The Enthusiasm for Bitcoin ETF Re-emerges

ProShares’ Bitcoin Strategy ETF (BITO) has achieved a significant milestone as it experienced its largest weekly inflow in a year, totaling $65.3 million. The fund’s assets have also crossed the $1 billion mark.

Bloomberg’s senior ETF analyst, Eric Balchunas, observed a significant increase in inflow toward the ProShares Bitcoin Strategy ETF (BITO) on June 26.

https://twitter.com/EricBalchunas/status/1673106982365003782?s=20Since its launch in 2009, Bitcoin (BTC), the pioneering cryptocurrency, has been a subject of fascination and volatility.

Over the years, investors have sought ways to gain exposure to Bitcoin’s potential without directly owning the digital asset.

This quest has led to the emergence of Bitcoin exchange-traded funds (ETFs), which offer investors an opportunity to invest in Bitcoin through traditional stock exchanges.

Among the Bitcoin ETFs, ProShares’ BITO has emerged as a favorite among institutional investors in the United States. It holds the distinction of being the first Bitcoin-linked ETF introduced in the country.

Since its launch in October 2021, BITO has garnered significant attention for its innovative approach to tracking Bitcoin’s performance.

Blachunas stated that BITO had exhibited remarkable accuracy in mirroring Bitcoin’s price movements, with a slight delay of 1.05% on an annual basis. The fund charges a fee of 0.95%.

The Resurgence in Bitcoin ETF Trading a Positive News

Since the beginning of 2023, ProShares’ BITO fund has achieved a 59.6% gain, closely mirroring the BTC price increases this year.

BITO’s success also reflects the broader trend of ETFs gaining popularity across various asset classes.

ETFs have become a preferred investment vehicle for many investors due to their flexibility, liquidity, and diversification benefits.

The introduction of Bitcoin ETFs allows investors to access the cryptocurrency market through a regulated and familiar investment structure.

Moreover, recent BlackRock’s submission of its Bitcoin ETF proposal to the United States Securities and Exchange Commission (SEC) has increased interest in Bitcoin derivative products.

In the past few days, the open interest (OI) for Bitcoin futures on the Deribit crypto options exchange has risen significantly.

As of June 25, the OI currently stands at $319 million, indicating a growth of around 30% compared to the previous week.

Open interest (OI) represents the cumulative count of outstanding futures contracts that remain open and have not been resolved.

It acts as an indicator of broad market participation and activity in trading Bitcoin futures.

Furthermore, Grayscale, the world’s largest crypto asset manager, has benefited from the increased trading of ETFs and the subsequent rise in BTC prices.

The Grayscale Bitcoin Trust (GBTC), which had been trading at a significant discount compared to the actual BTC prices for several months, is now moving in a positive direction as the gap between the two narrows.

According to Coinglass, the discount on Grayscale, also known as the Grayscale premium, currently stands at -31.2%. This figure dropped to as low as -49% in December 2022.

While it remains uncertain whether the SEC would approve a spot Bitcoin ETF, various companies have begun submitting applications following BlackRock’s lead.

WisdomTree recently filed with the SEC for the third time to create a spot Bitcoin ETF, and shortly after, Invesco renewed its application for a similar product.

On June 25, Nate Geraci, President of ETF Store, shared a list of ETF issuers on Twitter he believes are likely to file or refile for a spot Bitcoin ETF based on their past filings.

Geraci mentioned First Trust, VanEck, Global X, Fidelity, and what he referred to as the “dark horse,” Schwab, as issuers to watch closely.

The recent increase in inflows to ProShares’ Bitcoin Strategy ETF (BITO) highlights the growing excitement surrounding Bitcoin ETFs.

As the crypto landscape continues to evolve, Bitcoin ETFs provide a bridge between traditional finance and the digital asset world.

This offers investors a regulated and convenient pathway to participate in the potential of Bitcoin.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.