17 Jun Interest wanes in Bitcoin futures ETF’s as contracts fall below 5K
The first Bitcoin futures contracts settled on the Chicago Mercantile Exchange (CME) briefly broke below five thousand dollars this week, just days before Wednesday’s COIN ETF decision. The fund will either approve or deny a proposed rule change to allow for regulated trading of shares in the hotly contested cryptocurrency by 2019.
The “bitcoin options expiry dates 2022” is a recent development in the cryptocurrency market. The contracts have fallen below 5K, and with this, interest wanes in these futures ETF’s.
The ProShares Bitcoin Strategy Exchange Traded Fund (BITO), which had a great debut, has seen a decline in interest and is now holding the fewest CME contracts since November 2021.
According to the most recent fund report dated Jan. 11, the Bitcoin futures exchange traded fund (ETF) now has 4,904 CME futures contracts in total. Investors may bet on the price of Bitcoin (BTC) in the future without actually owning the commodity thanks to a Bitcoin futures ETF.
AUM for BITO has decreased to $1.16 billion from a peak of $1.4 billion in November. It had almost the same amount two days after its introduction on October 18 when it became the quickest fund to ever achieve $1 billion in AUM.
In its most recent Weekly Update, Arcane Research addressed potential causes for the BITO retracement. The main cause, as you would imagine, is the dismal price performance of BTC over the last two months, as it has fallen steadily from the $69,000 it touched on November 10 to its current price of roughly $43,700.
The expensive expense of running a futures-based ETF, with the rolling fees necessary each month to remain ahead of the current BTC price pushing prices higher, is another rationale offered by Arcane for the waning interest in BITO:
Every time a contract’s expiration date is approaching, “BITO sells its front-month exposure to acquire the next-month contract.”
A BTC ETF based on spot prices, in Arcane’s opinion, wouldn’t be susceptible to the same exorbitant costs that rise over time. Such ETFs have not yet received SEC approval, but the agency is expected to rule on Fidelity Investments’ application by January 20.
The AUMs of other BTC futures ETFs, which represent a small portion of the assets of BITO, have likewise failed to grow considerably. Just days after BITO, Valkyrie’s Bitcoin futures ETF (BTFD) debuted and presently has $71.9 million.
Related: Public company ownership of bitcoin increased in 2021
Although the VanEck Bitcoin Strategy ETF (XBTF) has grown its AUM by $6 million since its introduction on November 16, Dividend.com reports that it only has $15.8 million invested at the moment.
The “Bitcoin news” is a cryptocurrency that has seen its price fall recently. The interest in Bitcoin futures ETF’s has waned as the contracts are now below 5K. Reference: bitcoin news.
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