***Bitcoin Futures ETF Reaches Record $1.47 Billion in Assets***
**BITO Surpasses $1 Billion in Assets**
The ProShares Bitcoin Strategy ETF (BITO) has reached a record high of $1.47 billion in assets under management, marking a significant milestone for the first and largest bitcoin futures ETF.
Since its launch in October 2021, BITO has quickly grown to over $1 billion in assets, reaching an all-time high of $1.42 billion in November of the same year. However, the fund’s assets experienced a sharp decline to about $500 million in November 2022 following the collapse of crypto exchange FTX, which triggered a drop in bitcoin prices.
**Resurgence in Assets and Market Appreciation**
Despite the setback, BITO’s assets under management stood at $850 million as recently as October 12, with the fund witnessing net inflows of $202 million since that date. CoinShares reported that other crypto investment products have also seen significant inflows, bringing in approximately $350 million in the last week, marking the ninth consecutive week of positive flows.
Market appreciation has also contributed to BITO’s asset rise, with bitcoin’s price standing at about $37,750 at 11:30 am ET on Wednesday, representing a 130% increase from a year ago and a 9% increase in the last 30 days.
**Competition and Potential Regulatory Approvals**
ProShares investment strategist Simeon Hyman attributed BITO’s asset peak to the demand for a familiar, accessible, and regulated way to target the returns of bitcoin. BITO’s average daily trading volume of $160 million places it in the top 5% of all US ETFs, according to Hyman.
However, the fund may face increased competition as industry watchers anticipate the approval of ETFs by the US Securities and Exchange Commission that would hold bitcoin directly, marking a significant regulatory first. The SEC’s deadline to rule on such a proposal by Ark Invest and 21Shares is January 10, following which the SEC could also greenlight spot bitcoin ETFs from BlackRock, Fidelity, Invesco, and other providers.
**Speculation and Future Outlook**
Bloomberg Intelligence analyst Eric Balchunas noted that BITO’s increase in assets may be ironic, considering its potential fate once spot ETFs are available. He believes that BITO may face pressure or see some outflows once spot ETFs become more prevalent.
However, Ophelia Snyder, president of 21Shares, believes that there is still a role for futures-based products in the market, despite the broader appeal of spot bitcoin ETFs. 21Shares and Ark Invest recently launched crypto futures ETFs, highlighting the ongoing evolution and competition within the rapidly growing cryptocurrency investment space.
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