The ProShares Bitcoin Strategy (BITO) ETF made history when it was approved. Launched exactly one year ago today, it was the first futures-based BTC ETF in the United States and garnered massive attention from the broader financial market. As BITO celebrates its one-year birthday today, we take a look at how the ETF has performed over time and its current performance compared to when it first launched.
The Year In Review
The ProShares Bitcoin Strategy (BITO) ETF had been highly anticipated, which had been apparent in the trading volume recorded just after launch. In the first two days, the BITO saw more than $1 billion in trading volume, making it the fastest ETF to ever hit that figure.
BITO saw more than 20,000 BTC in exposure just days after the launch and excitement continued to grow as talks of Spot Bitcoin ETFs made the rounds. Its performance during this time had grown to about a positive 0.3% versus the BTCUSD. However, this would only last for a short time.
Shortly after the BITO launch, the crypto market had seen a massive crash that caused the value of the digital assets in the market to decline significantly. BITO would begin trading below BTCUSD shortly after, and even though there has been some recovery since then, to continues to underperform Bitcoin.
BITO underperforms BTCUSD | Source: Arcane Research
Presently, BITO is underperforming the BTCUSD spot pair by a negative 1.79%. It is a good recovery from the negative 2.8% figures from December 2021, and investors are making good time in 2022. BITO’s exposure as of this week sits at 32,520 BTC. This is just slightly below its all-time high of 34,520 BTC back on August 3rd. This shows that investors are still optimistic about the future of the fund.
Bitcoin Spot ETFs Meet Resistance
Even though the Securities and Exchanges Commission (SEC) has given the green light to multiple bitcoin ETFs in the past year, it is still adamant about not approving any Spot Bitcoin ETFs. The regulator has pointed out that concerns about the risks of investing in a Spot BTC ETF have been behind this, but companies have not been receptive to this.
BTC price at $19,165 | Source: BTCUSD on TradingView.com
The most prominent of the companies that have pushed back against the SEC’s stance on this is Grayscale. The firm which manages various crypto funds had applied to turn its infamous Grayscale Bitcoin Trust (GBTC) into a Spot ETF but had been rejected. Grayscale did not take this rejection lightly though as it sued the regulatory body, citing that its argument for not approving a BTC Spot ETF was “flawed” and “inconsistently applied”.
The SEC has so far rejected more than a dozen BTC Spot ETF applications including those from WisdomTree and Ark21Shares. Presently, Grayscale’s case against the SEC is still ongoing, but there is no timeline on when the regulatory body would approve a Spot ETF.
Featured image from Techstory, charts from Arcane Research and TradingView.com
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