BITO reaches highest asset level as potential approval of bitcoin ETF approaches
ProShares Bitcoin Strategy ETF reaches record high assets under management
The ProShares Bitcoin Strategy ETF (BITO) has hit a new milestone, reaching $1.47 billion in assets under management on Tuesday. This marks the highest point in the fund’s history, reflecting the increasing demand for bitcoin-related investment products.
Rapid Growth and Recovery
BITO had initially surpassed $1 billion in assets shortly after its launch in October 2021, reaching a peak of $1.42 billion the following month. However, the fund’s assets plummeted to around $500 million in November 2022 following the collapse of the crypto exchange FTX, which triggered a decline in bitcoin prices.
Recent Recovery
However, the fund has seen a resurgence in its assets, with a recent increase in net inflows. On October 12, BITO’s assets under management stood at $850 million, but the fund has since experienced net inflows of $202 million, according to ETF.com. Additionally, other crypto investment products have also seen positive inflows, with approximately $350 million coming in last week.
Market Appreciation and Positive Flows
The rise in BITO’s assets can also be attributed to market appreciation, with bitcoin’s price currently standing at about $37,750, showing a 130% increase compared to a year ago and a 9% increase over the last 30 days. The positive flows into crypto investment products have been sustained, marking the ninth consecutive week of inflows, as reported by CoinShares.
Outlook and Competition
ProShares investment strategist Simeon Hyman commented on BITO’s asset peak, noting the demand for a regulated way to target bitcoin returns. Despite BITO’s success, it faces potential competition from upcoming ETFs that could hold bitcoin directly. Industry watchers expect the US Securities and Exchange Commission to approve such ETFs, marking a significant milestone for the regulator.
Bloomberg Intelligence analyst Eric Balchunas emphasized the potential pressure on BITO once spot ETFs are approved, as investors may prefer those over futures-based products. However, others, such as 21Shares president Ophelia Snyder, believe there is still a role for futures products in the market, even with the introduction of spot ETFs.
Overall, BITO’s achievement reflects the growing interest in bitcoin-related investment products, as well as the potential for further developments in the cryptocurrency ETF space.
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