The first American bitcoin (BTC) exchange fund was recently warmly welcomed by the crypto community. Years have been awaited for this development, but the redeeming green light of the Securities and Exchange Commission (SEC) luckily did not last.
The first few days that it ProShares bitcoin futures ETF (BITO) traded on the US, the volume was immediately skyrocketing. On the first day, this trading volume was more than $1 billion. This volume did not collapse on the second day. At that time, too, the trading volume was over $1 billion.
Popularity
This, of course, speaks volumes about the popularity of bitcoin ETFs. For years investors had to wait for such an investment product and when the moment finally came, they quickly seized their chance.
In fact, the popularity of the ProShares bitcoin ETF is so high that it seems that the limit on the number of contracts that can be closed will be reached soon. For the month of October, 1,900 contracts have already been concluded and there is a maximum of only 2,000 contracts.
The contracts for the month of November are already quite full. In the meantime, 1,400 contracts with a maximum quantity of 5,000 have already been concluded for the next month.
At first glance, this seems like an excellent development. The demand for bitcoin exposure from traditional investors is high. Still, the huge interest in the bitcoin futures ETF could have some ill effects.
This can lead to the price of the ETF deviating further and further from the price of bitcoin. A futures ETF is only derived from the bitcoin price. It does not directly represent the bitcoin price.
Bloomberg ETF analyst Eric Balchunas recently said he sees the current popularity of the first bitcoin ETF as a positive development. According to him, the momentum generated in the first few days is now hard to stop.
“The unparalleled early volume in BITO makes it like a snowball rolling down a hill […]”
According to him Will the success of this first ETF also increase the possible adoption of bitcoin? spot Accelerate ETFs in the Future.
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