The ProShares Bitcoin Strategy ETF (BITO) has seen a significant increase in investments over the past month, with a total of $250 million worth of flows. This surge in investment signals strong anticipation for the approval of a spot ETF in the United States.
Revival of Futures ETFs
Bloomberg ETF analyst Eric Balchunas shared that BITO’s assets have nearly doubled in value over the last 30 days, from around $850 million to $1.37 billion as of November 10. While Bitcoin’s rising price contributed to most of this growth, approximately $240 million came from concrete inflows. The fund is also expected to break its trading volume record, with $2 billion worth of trades in one week.
Upon its launch in October 2021, BITO absorbed $1 billion worth of inflows in just two days, marking the second-largest opening day in the history of the New York Stock Exchange (NYSE).
Seeking Bitcoin Exposure
Despite being the first Bitcoin ETF in the United States, BITO invests in Bitcoin futures contracts rather than actual BTC. This means that its shares do not perfectly track Bitcoin’s price like a spot-based ETF would. U.S. regulators have not yet approved a spot-based ETF due to concerns about market manipulation. However, analysts expect an ETF approval by early January due to mounting public pressure and a recent court defeat to Grayscale surrounding its spot Bitcoin ETF application.
Until then, BITO remains a popular tool for institutions seeking BTC exposure through an equity or an ETF wrapper. Other popular stocks for institutional BTC exposure include Coinbase (COIN), MicroStrategy (MSTR), and Bitcoin mining stocks like Marathon Digital (MARA).
Hot Take
The ProShares Bitcoin Strategy ETF (BITO) has seen significant growth over the past month, with $250 million worth of flows and anticipation for a potential spot ETF approval driving its success. With its assets nearly doubling and strong trading volume, BITO continues to be a popular choice for institutions seeking exposure to Bitcoin until the potential approval of a spot-based ETF.
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