The Bitcoin Futures Market has developed as it supports institutions, and adding exposures to this asset class.
ProShares Bitcoin Strategy ETF (BITO) is the first U.S. bitcoin-linked ETF offering investors an opportunity to gain exposure to bitcoin returns in a convenient, liquid and transparent way. The Fund seeks to provide capital appreciation primarily through managed exposure to bitcoin futures contracts.
Since its launch on Oct. 19 Proshares’ Bitcoin futures exchange-traded fund (ETF) has been a popular choice with traders, rising to the top 2% of all ETFs in terms of total trading volume.
BITO has seen roughly $112.79 million combined inflows over the past nine days. While the figure pales in comparison to the first two days of the fund’s listing that saw $567.16 million and $489.51 million worth of inflows each.
On Nov. 10, ProShares investment strategist Leks Gerlak told U.S. News that BITO should have no issues with reflecting the value of Bitcoin as futures contracts play a key role in determining its spot value:
“There is no single reference price for Bitcoin, and the trading price of Bitcoin varies from one exchange to another, often between 1% to 2%, and sometimes by 4% to 5%. Expert research on this topic finds that the Bitcoin futures market dominates the price discovery process.”
“Over the past few years, Bitcoin futures and Bitcoin have historically provided very similar returns. Both correlation and beta have been very close to one to Bitcoin,” he added.
