The fund — trading under the ticker BITO — rose as much as 5.4 per cent to $42.15 before paring gains and turning negative at one point. Still, more than 12 million shares worth roughly $480 million changed hands, according to the data compiled by Bloomberg.
While comparisons are difficult because some funds are pre-funded, that volume makes it easily one of the busiest ETF debuts ever seen. Because of the way the fund settles trades, net flows into or out of the product probably won’t be known until overnight on Wednesday.
A Bitcoin ETF has been long-awaited by both crypto community and investors on Wall Street, many of whom have argued for years that approval by regulators would open up digital currencies to more mainstream investors. The ProShares fund is based on futures contracts and was filed under mutual fund rules that SEC Chairman Gary Gensler has said provide “significant investor protections.”
“We are really excited to bring BITO, the first Bitcoin-linked ETF, to investors as an important opportunity for them conveniently to invest in Bitcoin in their regular brokerage account,” Simeon Hyman, global investment strategist at ProShares, said on Bloomberg TV. “This is going to allow many people who have been waiting for an easy way to do this and a robust way to do this to now be involved and have it in their portfolios.”
Retail investors rushed to buy the ETF Tuesday morning. BITO was the most bought asset on Fidelity’s platform with more than 5,500 buy orders coming from customers as of 11 a.m. New York time.
Bitcoin gained as much as 3.1 per cent to trade around $63,274, slightly below its April record high of just under $65,000. “It’s an incredibly bullish week— there’s been really positive sentiment around the ETF in particular,” said Sam Bankman-Fried, chief executive officer FTX, one of the largest crypto exchanges.
It’s long been assumed that whoever received approval first could stand to reap the greatest benefits — including industry recognition as well as potentially attracting huge amounts of cash. Some analysts are already bullish on BITO’s prospects — the futures-based Bitcoin ETF could attract more than $50 billion in inflows in its first year given the hype around it, according to noted Bitcoin bull Tom Lee, co-founder of Fundstrat Global Advisors.
There are other applications for futures-based Bitcoin ETFs in the queue. Analysts are anticipating launches from issuers such as Valkyrie, whose Bitcoin Strategy ETF, due to debut on Wednesday, will now trade under the ticker BTFD.
First Published: Wed, October 20 2021. 00:49 IST