ProShares’ first short Bitcoin ETF got off to a very slow start when it launched on June 21, but picked up speed by increasing trading volume by 380% on day two.
On launch day, June 21, the ProShares Bitcoin Short Strategy Exchange-Traded Fund (BITI) traded a lackluster 183,300 shares, which Bloomberg ETF analyst Eric Balchunas noted in a Tweeter was “less than 1% of the volume $BITO had at that time the first day.
However, the next day’s trading volume almost quadrupled to 886,200 shares worth around $36.2 million according to Yahoo Finance.
ProShares #Bitcoins The short-strategy ETF (BITI) trades over 870,000 shares, worth 35 million, on the second trading dayhttps://t.co/gyfMcm4UOz
– unfolded. (@cryptounfolded) June 22, 2022
The exchange-traded fund (ETF) BITI allows investors to take short positions in the Bitcoin market without holding BTC themselves. Shorting means speculating that the value of a market or asset will fall.
ProShares CEO Michael L. Sapir spoke of day two volume as indicative of demand and BITI’s low fee structure.
“The reception BITI is receiving in the market confirms investor demand for a convenient and profitable ETF to potentially profit from or hedge their cryptocurrency holdings when the value of bitcoin declines.”
ProShares also provides the Bitcoin Strategy ETF (BITO), which launched on October 18. BITO recorded a volume of approximately $1 billion on the first day of trading.
In November, BITO’s volume was among the top 2% performers of any ETF, but it’s now lost 50.93% of its value since inception.
Of course, $36 million pales in comparison to the $1 billion long positions on day one. This may mean that most investors don’t know if there are any further declines from here. In the past 30 days, the largest crypto by market capitalization has lost more than 30% of its value.
BITI’s relatively poor performance on launch day drew mockery from CFA at Bloomberg Intelligence James Seyffart. On June 21, Seyffart tweeted that in the first hour of trading, BITI only made around $1 million in volume.
Seyffart said that he expected the opening volume to be low, but “Yeah, I’m not saying that’s a surprise. Although I have to admit I’m a little surprised it’s so low.
So.. $BITIthe opposite of Proshares #Bitcoins The futures ETF that was launched today is off to a rather slow start due to its volume. Admittedly, he only started trading around 9:57. Sooo we have an hour of trading and only $1 million in total trading volume… https://t.co/Hf0XFeGmsX
—James Seyffart (@JSeyff) June 21, 2022
At close, BITI had made approximately $7.1 million in volume at a daily average price of $39.06 per share.
Related: Elusive Bitcoin ETF: Hester Peirce criticizes lack of legal clarity for crypto
New Australian Bitcoin ETFs also struggled to generate interest. In April, the Cosmos Purpose Bitcoin Access ETF (CBTC) was expected to attract $1 billion in inflows. However, this and the launch days of the ETFS 21Shares Bitcoin ETF (EBTC) have been postponed to May 12.
US traders are still yearning for a spot Bitcoin ETF that the Securities and Exchange Commission has refused for years. Commissioner Hester Pierce believes a spot Bitcoin ETF can launch in the US when industry insiders and regulators cooperate more closely to ensure the two are on the same page.