Interest wanes in Bitcoin futures ETF’s as contracts fall below 5K

After
a
stellar
launch,
interest
has
waned
in
the
ProShares
Bitcoin
Strategy
Exchange
Traded
Fund
(BITO)
which
now
has
the
lowest
amount
of
CME
contracts
since
Nov.
2021.

The
Bitcoin
futures
exchange
traded
fund
(ETF)
holds
a
total
of
4,904
Chicago
Mercantile
Exchange
(CME)
futures
contracts,
according
to
the
fund’s
latest

update

from
Jan.
11.
A
Bitcoin
futures
ETF
allows
investors
to
speculate
on
the
future
price
of
Bitcoin
(BTC)
without
having
to
hold
the
asset
themselves.

BITO’s
assets
under
management
(AUM)
figure
has
retraced
to

$1.16
billion

from
a
high
of

$1.4
billion
last
Nov
.
This
is
about
the
same
amount
it
held
two
days
after
its
Oct.
18
launch
when
it
became
the

fastest
fund
to
reach

$1
billion
in
AUM
ever.

Arcane
Research
discussed
possible
reasons
for
the
BITO
retrace
in
its
latest

Weekly
Update
.
As
you
might
expect,
the
poor
price
performance
of
BTC
over
the
past
two
months
is
the
chief
explanation,
as
Bitcoins
drifts
ever
further
from
the
$69,000
it
reached
on
Nov.
10
down
to
its
current
price
around
$43,700.

Arcane
suggests
another
explanation
for
the
declining
interest
in
BITO
is
the
high
cost
that
comes
with
operating
a
futures-based
ETF,
with
the
rolling
costs
required
each
month
to
stay
ahead
of
the
current
BTC
price
driving
up
costs:

“BITO
sells
its
front-month
exposure
to
buy
the
next-month
contract
each
time
the
contract
approaches
expiry.”

Arcane
believes
that
a
spot-based
BTC
ETF
would
not
be
subject
to
the
same
high
fees
that
grow
over
time.
The
SEC
has

not
yet
approved

any
such
ETFs,
but
a
ruling
on
the
filing
by
Fidelity
Investments
is
scheduled
to
be
made
by
Jan.
20.

Other
BTC
futures
ETFs
have
also
failed
to
significantly
increase
their
AUMs,
which
are
a
fraction
of
the
assets
of
BITO.
Valkyrie’s
Bitcoin
futures
ETF
(BTFD),
which
launched
just

days
after
BITO
,
currently
holds
$71.9
million.



Related:




Bitcoin
holdings
of
public
companies
surged
in
2021

Although
the
VanEck
Bitcoin
Strategy
ETF
(XBTF)
has
increased
its
AUM
by
$6
million
since
its
Nov.
16
launch,
it
currently
holds
just
$15.8
million
according
to

Dividend.com
.

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