First Bitcoin Futures ETF Trades Nearly $1 Billion in One Day

The first U.S. BitcoinBitcoin futures ETF launched today, and eager investors traded $280 million-worth of shares in just the first 20 minutes. By the time the market closed on Tuesday, nearly $1 billion in shares changed hands. 

ProShares’ Bitcoin Strategy ETF began trading today on the New York Stock Exchange under the ticker BITO after receiving approval from the U.S. Securities and Exchange Commission on Friday. Investors wanting exposure to the biggest cryptocurrency were able to buy shares tied to the future price of Bitcoin, which rose to $42.15 at one point—a 5.4% increase from the initial net asset value of $40. The shares ultimately closed at $41.94, an increase of 4.85%.

Analysts told Decrypt that the sheer volume traded nearly broke a record: although it didn’t hit the $1 billion mark, it was close—figures from Bloomberg show $994 million was traded. Only one ETF in the history of U.S. ETFs hit $1 billion on its first day, and that was BlackRock’s Carbon Transition Readiness in April. 

“It was not expected. We thought it was going to be a big hit, we thought it was going to be successful,” Bloomberg ETF research analyst James Seyfarrt said. “I thought if it traded $250 million in the first day, it would be a success. It did that in just 30 minutes.”

The ETF gives institutional and retail investors access to Bitcoin, without them having to buy and store Bitcoin themselves, which can be complicated for some investors. There’s a small catch, though. This particular ETF is a futures one, meaning that investors are buying and selling shares that represent contracts betting on the price of Bitcoin. A spot-based product is still desired: a long-list of high-profile companies are awaiting approval on a Bitcoin ETF that is pegged directly to the price of the crypto. 

Bitcoin Futures Open Interest Hits Record High on CME

Just last week, industry analysts were noticing an uptick in institutional interest in Bitcoin. This week, after the approval of a Bitcoin futures ETF, Wall Street traders are really getting in on the action. Open interest in Bitcoin futures on the Chicago Mercantile Exchange (CME) now stands at $3.6 billion, higher than its previous record set in February. In contrast to other derivatives exchanges such as Binance and FTX, CME is the main source for U.S.-based institutional traders who want to...

The SEC has been slow to approve a true Bitcoin ETF, citing concerns around market manipulation in crypto. SEC Chairman Gary Gensler, however, indicated in August that the SEC would be inclined to approve an ETF that tracked Bitcoin futures, presumably because the futures market is already regulated by the CFTC.

While Bitcoin ETFs that give investors exposure to the cryptocurrency spot market do not exist in the U.S., they have been hugely successful in Canada. 

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Physical Bitcoin or not—ProShares’ Bitcoin Strategy ETF has proven that Wall Street investors are hungry for Bitcoin.