ProShares Bitcoin ETF trading volume plummets 75% as investors discover BTC ETF.

ProShares Bitcoin Strategy ETF (BITO), the world’s largest BTC futures-based ETF, is experiencing declining trading volume as investors turn their attention to the Bitcoin ETF (Exchange Traded Fund), which was launched on January 11.

small Just over $500 million worth of shares were traded on the NYSE on January 18, down 75% from the record high of $2 billion registered on January 11, according to data from Coinbase.

Source of data ETF.com Additionally, over the same period, BITO experienced a net outflow of over $270 million.

Spot Bitcoin ​ETF Trading Launches in the US

eleven dot The Bitcoin ETF recorded $14 billion in cumulative trading volume in its first week, which is more than the cumulative trading volume of all other ETFs launched in 2023. In total, these funds accumulated more than $1.2 billion in investor funds in their first week of trading.

Latest: Nevertheless $GBTC After seeing outflows of -$590m on Friday, The Nine trumped them with +$623m (third-best day). $GO & $FBTC Both over $200 million $BTCO & $HODL It was my best performance so far. TOT NET FLOWS recorded +$1.2 billion, with Nine’s AUM reaching $4 billion compared to GBTC’s -$2.8 billion, bringing its AUM share to 14%. pic.twitter.com/nB57H8Ro8s

— Eric Balchunas (@EricBalchunas) January 20, 2024

The approval of a spot Bitcoin ETF in the United States marks a watershed moment in the cryptocurrency space as it helps bring Bitcoin to mainstream investors. These funds allow institutional investors to gain exposure to major cryptocurrencies without the hassle of storing them safely.

dot bitcoin Additionally, the ETF offers investors a better alternative to futures-based ETFs like BITO due to the fact that BITO invests in CME BTC futures. As a result, existing investment contracts must be extended into new contracts, which incurs “roll costs” that negatively impact the fund’s long-term performance.

Futures-based ETFs still provide a good hedge.

Despite the significant decline in BITO’s trading volume, industry observers remain confident that ProShares’ Bitcoin Strategy ETF will play an essential role in the market as a hedging tool.

“It is not uncommon for APs (authorized participants) to fall back on regulated products like BITO to hedge their positions (known as deltas) because they do not have CME futures accounts,” said Laurent Kssis, a cryptocurrency trading advisor. said. CEC Capital and former ETF market maker told CoinDesk: “This is generally considered a good proxy for CME Bitcoin futures or when Bitcoin cannot be filled outright.”

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