Investor Interest in Bitcoin Futures ETF – Why?
After its successful launch, investor interest in the Bitcoin Strategy ETF (BITO) from ProShares, which currently has the lowest number of CME contracts since November 2021, is waning.
The Bitcoin Futures-based Exchange Traded Fund (ETF) holds a total of 3,804 CME futures contracts, according to the report.
To update new on 1.12. A Bitcoin futures ETF enables investors to speculate on future prices without having to hold Bitcoins themselves.
BITO’s Assets Under Management (AUM) has fallen from a record $ 1.4 billion last November to $ 1.16 billion today. This is equivalent to the amount it holds two days after its inception on October 18, making it the fastest fund to ever hit $ 1 billion in AUM.
Has arcane research discussion on the possible reasons for BITO’s decline in its latest weekly update. Of course, the poor performance of the spot BTC price over the past two months has been a major factor as Bitcoin continues to slide from the all-time high (ATH) of $ 69,000 it hit on November 10th. It currently hovers around the $ 43,000 mark.
Bitcoin price chart | Source: Tradingview
Arcane suggests another explanation for the declining interest in BITO in the high operating costs of a futures-based ETF, requiring rollover costs every month to stay ahead of the price.
“BITO sells the previous month’s exposure to buy the next month’s contract every time the contract expires.”
Arcane believes that a spot BTC ETF would not incur such high fees. The SEC has yet to approve spot ETFs, but a decision on Fidelity Investments’ proposal is expected to be made on Jan. 20.
Other BTC futures ETFs were also unable to extend their AUMs, which only make up a fraction of BITO’s assets. Valkyrie’s Bitcoin Futures ETF (BTFD) was launched just days after BITO and currently holds $ 71.9 million.
Although VanEck’s Bitcoin Strategy ETF (XBTF) has grown its assets under management to $ 6 million since its inception on Nov. 16, it currently only holds $ 15.8 million.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.