Last week, the first Bitcoin futures ETF launched on the New York Stock Exchange, allowing traditional investors to engage with Bitcoin without onboarding to a specialized crypto exchange. The ProShares Bitcoin Strategy ETF (BITO) debuted to near record breaking performance on many measures. According to Morningstar, BITO had the second highest volume for an ETF on launch day, the second largest assets under management for an ETF on day one, and the second largest first day return among ETF day one launches.
It’s important to note here that buying BITO is not a direct investment in Bitcoin, rather it’s an investment in Bitcoin futures contracts---agreements to buy or sell Bitcoin for a predetermined price. On opening day, there was just over $1B in trading volume, and Bitcoin itself continued it’s price climb breaking through to a new all time high of $66,999 on Wednesday.
There have been attempts to launch Bitcoin ETFs for years, but the SEC hasn’t made any moves to approve them until recently. In August, SEC Chairman Gary Gensler suggested his agency would be open to futures ETFs, and on Friday a second ETF launched. As of now, there is no indication of a timeline for a spot ETF, one that trades on the actual underlying asset.