March 27, 2024
Bitcoin ETF

ProShares Supports Spot Bitcoin ETF Impact on BITO Futures

ProShares, a leading issuer of Bitcoin exchange-traded funds (ETFs) based on futures, does not perceive any potential threats associated with the introduction of spot Bitcoin ETFs in the United States, according to a senior executive.

Simeon Hyman, ProShares’ global investment strategist, expressed optimism about the impact of spot Bitcoin ETFs on the operational and commercial aspects of the company’s futures products in an interview with Cointelegraph on February 2, 2024. The ProShares Bitcoin Strategy ETF (BITO), their flagship Bitcoin futures ETF, has witnessed efficient trading volumes since the launch of spot Bitcoin ETFs, with Hyman stating, “We’re pretty darn happy with the commercial impact so far.”

Hyman highlighted that BITO is trading with a minimal variance of two basis points from its underlying value. He noted that despite this, spot ETFs exhibit an average premium or discount of 36 basis points. In addition to commercial benefits, ProShares anticipates operational advantages from the increased adoption facilitated by spot Bitcoin ETFs, as they are expected to attract more participants to the Bitcoin market.

“With the entrance of spot ETFs, the futures market is getting better, even better. It was already a well functioning and regulated place, but it’s actually gotten a little better when with the spot guys because there’s just more people around Bitcoin again.”

Simeon Hyman, ProShares’ Global Investment Strategist

Hyman’s comments align with BITO’s trading patterns over recent weeks and months, excluding the abnormal surge in trading volume on January 11, 2024 amid the excitement surrounding spot Bitcoin ETF launches. While BITO’s trading volumes reached nearly $2 billion on January 11, 2024 it has since returned to its typical range, reaching as low as $180 million on February 2, 2024.

The news coincides with major spot Bitcoin ETFs such as BlackRock’s iShares Bitcoin Trust (IBIT) and Grayscale Bitcoin Trust ETF surpassing BITO’s trading volumes last week. Prior to this, BITO held the position of the largest Bitcoin ETF in the world based on trading volumes.

Launched in October 2021, BITO differs from spot Bitcoin ETFs as it tracks futures contracts instead of actual Bitcoin holdings.

Image by frimufilms on Freepik

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