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Bitcoin ETF goes from boom to bust after a record US debut

Bitcoin, the largest digital asset by market value, lost more than 34% in the two months
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The crypto bloodbath has turned a popular Bitcoin ETF that made its most successful debut ever into one of the biggest losers for the issuer in its first two months of trading.

With a 30% drop, the ProShares Bitcoin Strategy exchange-traded fund, BITO Tape, is now one of the 10 worst performers when looking at returns two months after the public listing, Bloomberg Intelligence data analyzed by Athanasios Psarofagis shows.

Thanks to the broader slump in cryptocurrencies as the Federal Reserve prepares to withdraw pandemic stimulus. Bitcoin, the largest digital asset by market capitalization, has lost more than 34% in the two months since BITO’s debut on October 19, significantly down from its November peak of over $68,000 per coin. Since the beginning of the year, the price of Bitcoin has fallen by about 10%.

“Timing can be difficult sometimes with ETFs,” said Psarovajis. “You don’t hear much about BITO’s failures since its launch.”

Bloomberg data at the time, when it made its first bid, showed BITO saw sales of nearly $1 billion, cementing it as the best debut after a fund that had pre-formation investments. The fund also attracted $1 billion in assets in just two days, a record. As for the crypto industry, it stressed the pent-up demand for bitcoin exposure in an ever-mature institutional ecosystem.

But BITO is down nearly 9% this week alone. Stream data shows that the initial orgasm didn’t last either. It hasn’t seen a single day of inflows since the start of 2022.

The fund is based on futures contracts and was introduced under mutual fund rules that SEC President Gary Gensler said offer “significant investor protection.” There is still no ETF that directly holds bitcoin in the US due to several regulatory concerns.

However, Psarofagis says its performance to date will not necessarily affect future industry growth. “You can see that some of the other ETFs have had a rough start but can still amass assets,” he said, referring to his listing.

This story was published from the news agency feed without modifications to the text. Only the title has changed.

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