The ProShares Bitcoin Strategy ETF (BITO) made history when it was approved. Launched exactly one year ago today, it was the first futures-based BTC ETF in the United States and garnered massive attention from the broader financial market. As BITO celebrates its first anniversary today, we take a look at the ETF’s performance over time and its current performance compared to its initial launch.
The year in review
The ProShares Bitcoin Strategy ETF (BITO) had been highly anticipated, which was evident in the trading volume recorded right after its launch. In the first two days, BITO recorded a trading volume of over $1 billion, making it the fastest ETF to ever reach this figure.
BITO saw over 20,000 BTC exposed just days after launch and the excitement continued to grow as talk of Spot Bitcoin ETFs made the rounds. Its performance during this period was around 0.3% positive against BTCUSD. However, this will only last for a short time.
Shortly after the launch of BITO, the crypto market experienced a massive crash which led to a significant drop in the value of digital assets in the market. BITO would start trading below BTCUSD soon after, and while there has been some recovery since then, it continues to underperform Bitcoin.
BITO underperforms BTCUSD | Source: Arcane Research
Currently, BITO is underperforming the BTCUSD spot pair by minus 1.79%. This is a good recovery from the negative figures of 2.8% in December 2021, and investors are making good progress in 2022. BITO’s exposure this week sits at 32,520 BTC. This is just a bit below its all-time high of 34,520 BTC from August 3. This shows that investors are still optimistic about the future of the fund.
Bitcoin Spot ETFs encounter resistance
Even though the Securities and Exchanges Commission (SEC) has given the green light to several Bitcoin ETFs over the past year, it is still adamant about not approving Spot Bitcoin ETFs. The regulator has pointed to concerns about the risks of investing in a Spot BTC ETF as driving this, but companies have not been receptive.
BTC price at $19,165 | Source: BTCUSD on TradingView.com
The most prominent of the companies that have pushed back against the SEC’s position on this is Grayscale. The company that manages various crypto funds had applied to turn its infamous Grayscale Bitcoin Trust (GBTC) into a Spot ETF, but was rejected. Grayscale did not take the rejection lightly, however, as it sued the regulator, citing that its argument for not approving a Spot BTC ETF was “flawed” and “inconsistently applied.”
The SEC has so far rejected more than a dozen BTC Spot ETF applications, including those from WisdomTree and Ark21Shares. Currently, Grayscale’s case against the SEC is still ongoing, but there is no timeline on when the regulator would approve a Spot ETF.
Featured image from Techstory, charts from Arcane Research and TradingView.com
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