With a 30% drop, the ticker BITO, the ProShares bitcoin strategy exchange-traded fund, is now among the 10 worst performers when looking at returns two months after the public listing, Bloomberg analyzed by Athanasios Psarofagis shows. Intelligence Data.
Thanks to a sweeping return to digital currencies, the Federal Reserve prepares to roll back pandemic stimulus. Bitcoin, the largest digital asset by market cap, lost more than 34% in the two months following BITO’s launch on October 19, and is well below its November peak at $68,000 per coin. Bitcoin is down about 10% since the start of the year.
Psarofagis said, “Sometimes times can be tough with ETFs. You haven’t been hearing much about its performance flop since BITO went live.”
When it made its debut, BITO saw a turnover of nearly $1 billion, cementing it as the best start behind only a fund that had pre-seed investments, Bloomberg data showed at the time. The fund amassed a billion dollars in assets in just two days, a record. For the cryptocurrency industry, this underscores the increased demand for bitcoin exposure in the ever-mature institutional ecosystem.
But this week alone BITO is down close to 9%. And the flow data show the initial enthusiasm has not kept up. It has not seen a single day of inflow since the start of 2022.
The fund is based on futures contracts and was filed under mutual fund rules that SEC Chairman Gary Gensler has said “provide significant investor protection.” An ETF that directly holds bitcoin does not yet exist in the US due to a multitude of regulatory concerns.
Still, Psarofagis says its performance so far will not affect future industry growth. “You can see that some other ETFs have got off to a bad start out of the gate but can still grow wealth,” he said in reference to his list.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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