ProShares Bitcoin Strategy’s exchange-traded fund (ETF) trading volume exceeded $ 1 billion on day one.
By 4:27 p.m. ET, after the US exchanges closed on Tuesday, the ProShares ETF (BITO) had traded in volume of 24.1 million shares, which is worth more than $ 1 billion based on the closing price.
The fund’s price rose to $ 41.94 at the end, an increase of 4.9% from the initial net asset value of $ 40.
Based on day one trading volume, the launch would place the new ETF in the top two or three of all time, said Dave Nadig, chief investment officer and director of research at ETF Trends.
Most of the trading appears to be from retail investors as there have been few large “block” trades the size that large institutional traders often trade, Nadig said.
“This will probably be what we all expected, namely an access vehicle for certain players in the market,” said Nadig in a telephone interview. “There are many people who are active participants in the markets who just don’t want to cross the crypto bridge alone.”
The new ETF debuted when Bitcoin price soared to a six-month high on Tuesday and climbed to its all-time high near $ 65,000 in April.
At press time, the cryptocurrency changed hands at around $ 64,242, up 4.9% over the past 24 hours.
Matt Hougan, Bitwise Asset Management’s chief investment officer, said in email comments that the strong results on day one suggest that “a large amount of capital is still locked out of the crypto market simply because it’s difficult to access.”
“That will change over time, and that capital will come into the market,” said Hougan. “That’s a pretty bullish signal in the long run.”
Jeff Dorman, Arca Funds’ chief investment officer, wrote in a newsletter Tuesday that “this has been a long, arduous journey for many and will be another indicator of digital assets moving into the mainstream.”
The ProShares ETF is the first of its kind in the US and offers investors the opportunity to participate in Bitcoin’s returns by simply buying an ETF on a brokerage account.
The US Securities and Exchange Commission approved the ETF on Friday, and several other pending ETF proposals could be approved by the SEC later this week.
The ProShares ETF is structured to invest in Bitcoin futures contracts that are traded on the Chicago-based CME, rather than investing directly in the cryptocurrency.
So the ETF alone will not create new demand for Bitcoin. However, traders could buy more Bitcoin to hedge against the futures price or to take advantage of price differences.