A year back from now, America launched its first Bitcoin Futures ETF allowing institutional investors a way to get exposure to Bitcoin. The Proshares Bitcoin futures ETF (BITO) was the first to launch in the market and has delivered relatively better performance in comparison to its peers.
But since its launch last, the fund has slumped 70% dragging allows with the BTC price. Over the last year, the BITO ETF saw cumulative inflows of more than $1.8 billion, however, is currently left with only $619 million. James Seyffart, a Bloomberg Intelligence analyst said:
“It’s been a bad year — we’re looking at $1.2 billion burned. But if you just want exposure to Bitcoin, BITO is the best option in the ETF landscape, at least in the US.”
However, since the BITO ETF launched last year, Bitcoin has been majorly on a downtrend. Nate Geraci, president of The ETF Store, an advisory firm said:
“BITO is one of the most ill-timed ETF launches in history, with its debut nearly perfectly coinciding with the price of spot Bitcoin topping out. The upside of that extremely poor timing is that the Bitcoin futures curve flattened out, minimizing the negative impact of rolling contracts every month.”
BITO’s launch last year was a breakthrough event for the crypto space. It debuted as the second-most heavily-trade Bitcoin fund ever with $1.1 billion in AUM. Operationally, BITO’s performance has also been near-flawless. Also, in the last 12 months since its launch, BITO saw only two outflows. Since its launch, BITO has trailed the spot Bitcoin price by only 2 percentage points.
However, BITO’s ETF is not exactly what die-hard BTC fans are looking for! This ETF doesn’t give fans the ability to hold Bitcoins directly. As a result, the industry is keenly awaiting a spot in Bitcoin ETF in the market. However, the SEC has been rejecting proposals left and right citing a lack of consumer protection measures.
Coming to BITO, Geraci believes that BITO’s performance gap with the spot BTC price could widen in the coming months. He added:
“The bottom line is that BITO still underperformed — even during an absolutely brutal crypto winter.” If, and when, the crypto space turns around, “expect the futures curve to steepen and the negative performance gap between BITO and spot Bitcoin to widen. Meanwhile…Still. No. Spot. Bitcoin. ETF.”
Currently, Bitcoin is trading at $19,397 with a market cap of $372 billion. The open interest in Bitcoin futures is currently very high hinting at a price swing to the north.