The ProShares Bitcoin Strategy (NYSE:BITO) has become the fastest ever ETF to pull in US$1bn of assets under management, smashing a previous record held by Gold ETF which launched in 2004.
Like the gold exchange traded fund, BITO was launched amid fevered demand for the asset underlying the packaged investment product (in this case, Bitcoin).
BITO debuted on Tuesday and saw close to US$1bn worth of units change hands through on-exchange dealing, whilst some US$570mln of day one fund inflows were reported in the financial press – only a day later the ETF’s assets under management hit US$1bn, according to Bloomberg Intelligence Data. It kept going, ending Wednesday with US$1.1bn of assets under management.
The exchange traded fund invests in bitcoin futures contracts, rather than participating in the underlying cryptocurrency market to buy actual Bitcoins, and thus price appreciation of the fund’s shares may not track the bitcoin spot market price.
BITO climbed about 8.2% to US$43.28 from its inception price of US$40.
As the same time, Bitcoin separately reached an all-time high as it rocketed over US$66,000. It had started Tuesday morning at US$62,000.
BITO is the first U.S. bitcoin-linked ETF, having received clearance from the Securities and Exchange Commission’s (SEC) last Friday.
Valkyrie Investments’ Bitcoin Strategy ETF (BTF) look set to quickly become join BITO, after it won the blessing of the U.S. Securities and Exchange Commission and is set to start trading on Nasdaq this coming Friday (22nd October).