ProShares Bitcoin Futures ETF Breaks Record With $1 Billion AUM in Two Days

On October 19th, the ProShares Bitcoin Future&39s ETF (BITO) was approved for trading in the United States. Just two days later it has already amassed over $1 Billion in assets under management (AUM), making it the fastest ETF ever to reach $1 Billion AUM in the united states. The record was previously held by the first gold ETF approved in 2004.

BITO went live last Tuesday as an alternative investment vehicle for retail and institutional investors interested in indirect bitcoin exposure. The fund invests in bitcoin futures contracts, rather than actual BTC, and thus price appreciation of the fund&rsquos shares may not track the bitcoin spot market price. Many who have been pushing for a Bitcoin ETF were disappointed that the futures ETF was approved prior to a "spot" ETF. A spot EFT would hold physical Bitcoin instead of merely futures contracts. Many in the Bitcoin space actually look at this approval as a negative for Bitcoin, because it allows more market manipulation by Wall Street and higher prices for consumers.

"A futures-based ETF price will not necessarily match the current price of the underlying asset. In most cases, futures ETFs based on commodity assets such as gold tend to underperform physical ETFs," said Mikkel Morch, executive director at crypto and digital assets hedge fund ARK36.

A second offering linked to BTC, the VanEck Bitcoin Strategy ETF (XBTF) has received regulatory approval to list in the country and is set to begin trading on October 25. This also represents a futures-based ETF.

Regardless of if you believe this is a net positive or a net negative for retail investors, the price of Bitcoin has clearly responded positively to the news. Bitcoin charted new all-time highs of over $67K on the day after the approval was announced.