Bitcoin ETF Surpasses $1.5 Billion AUM
The ProShares Bitcoin Strategy ETF (BITO) has reached a new milestone with nearly $1.5 billion in Bitcoin futures contracts, making it the largest bitcoin ETF in the United States. This record-breaking achievement demonstrates the growing interest among institutions to gain exposure to BTC before the expected approval of a bitcoin spot ETF by January.
Bitcoin Funds Attract Capital
On November 10, 2021, BITO set its previous record of $1.44 billion in AUM, coinciding with BTC’s all-time high of $69,000. On Tuesday, BITO reached a new record of $1.47 billion as BTC hit a yearly high of $38,300. The fund has experienced significant growth in November, rising from $1.1 billion to $1.42 billion within the first ten days of the month.
Spot vs Futures ETFs
Unlike the ProShares ETF, a bitcoin spot ETF holds actual BTC to back its shares, providing more accurate tracking of bitcoin’s price compared to futures-based equivalents like BITO. Shares in BITO have increased by only 79.94% year-to-date, while shares in Purpose Bitcoin CAD ETF (BTCC.B) have risen by 122%. BTC itself has seen a 127% increase.
Expectations for a Bitcoin Spot ETF
Although U.S. regulators have not yet approved a bitcoin spot ETF, recent developments indicate that one may be introduced within the next two months. Applicants such as BlackRock and Grayscale are actively engaging with the Securities and Exchange Commission (SEC) to prepare their ETFs for the market. Experts believe that a bitcoin spot ETF will attract institutional capital that was previously unavailable for direct investment in BTC.
Hot Take: Bitcoin ETFs Pave the Way for Institutional Adoption
The success and growing assets under management of bitcoin ETFs like BITO highlight the increasing interest from institutions in gaining exposure to BTC. While futures-based ETFs like BITO have provided an alternative for investors, a spot ETF backed by actual BTC holds the potential to unlock even greater institutional capital into the cryptocurrency market. As conversations with regulators progress, the arrival of a bitcoin spot ETF within the next few months could be a significant catalyst for broader institutional adoption of BTC.
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