ETF BITO, which tracks the price of bitcoin, had the greatest first-day “natural” volume of any ETF, hitting a little more than $1 billion by the conclusion of trading. Nevertheless, it comes in second place, behind only the Blackrock US Carbon Transition Readiness ETF, which debuted in April and saw $1.16 billion in volume on its first day of trading.
On October 19, the ProShares Bitcoin futures-based ETF went public on the NYSE at a price of $40.88. With a first-day volume of 24.313 million shares, BITO ended the day at $41.94, according to TradingView data. This equates to a first-day volume of little over $1 billion. According to Bloomberg’s senior ETF analyst Eric Balchunas, the ProShares ETF had the greatest amount of “natural” or “grassroots interest” on the BITO’s first day.
“One pre-planned big investor,” according to Balchunas, drove the April launch volume of Blackrock’s US Carbon Transition Readiness ETF (LCTU). In the days after debut, LCTU’s daily volume likewise plummeted to between $2 million and $6 million. An initial inflow of $570 million into the BITO ETF suggests that ProShares’ ETF may be a heavyweight in terms of net year-one flows for a single commodity ETF that is new to market in the next year.
Gold and silver are the top two commodity ETFs, according to FactSet, with $3 billion and $1.7 billion in year-one flows, respectively. The Invesco QQQ Trust had the highest year-one flow of $5.351 billion outside of commodities. ProShares’ positive performance is a major milestone for the crypto industry, but despite this, Balchunas cautioned that other firms planning to establish their own Bitcoin (BTC) futures ETFs may find it difficult to compete with it.
If we don't exclude ETFs where their Day One volume was literally one pre-planned giant investor or BYOA (not natural), it still ranks #2 overall. Here's that list. The reason some of these shouldn't be included IMO is they don't really represent grassroots interest. pic.twitter.com/wmZiHnpFrS
— Eric Balchunas (@EricBalchunas) October 19, 2021
Wondering how big the new bitcoin futures ETFs might get?
The white papers we submitted to the SEC last week have some context. For instance, here's a table of the first year net flows into every first-to-market single commodity ETF (FactSet data).https://t.co/3UnIel6sfX pic.twitter.com/h5Jg6RdgWd
— Matt Hougan (@Matt_Hougan) October 18, 2021
The clock is ticking. Everything matters because it’s almost difficult to steal from an ETF that has become well-known as “the one.” Following the introduction of ProShares’ ETF on Tuesday, Gary Gensler, chairman of the Securities and Exchange Commission (SEC), explained why he and the SEC prefer ETFs backed by Bitcoin futures over the current price of BTC in an interview.
The Commodities Futures Trading Commission, the SEC’s sister body, has been in charge of BTC futures for the last four years. You’ve got something that’s been under federal regulator supervision for the last four years, and the Investment Company Act of 1940 places it within the authority of the SEC,” he added. This week, Valkyrie’s Bitcoin futures-based ETF will join BITO on the NYSE. It altered its ticker to BTFD, an abbreviation for Buy The F—ing Dip just to be funny.
