The Purpose Bitcoin ETF, the first Bitcoin futures exchange-traded fund (ETF) in North America, has surged to a new all-time high in the number of bitcoins. The Purpose Bitcoin ETF allows investors access to risk-adjusted returns above 100% token ownership.
According to statistics from on-chain data analytics company Glassnode, the Canadian ETF presently has more than 36,271BTC and has witnessed a net gain of 2,473.5BTC in the preceding two weeks. Since both the prevailing attitude of the market and the price of Bitcoin have improved over the previous two weeks, the climb has been fueled by a massive injection of funds.
Meanwhile, as per Arcane Research, the ProShares ETF’s total Bitcoin exposure has reached a new all-time high of almost 28,000 BTC. This is after two weeks of strong inflows. ProShares ETF trades on the New York Stock Exchange under the symbol BITO.
The pursuit of delta neutrality by market makers could have an impact on Bitcoin prices, prompting them to buy more in the spot markets to counter any potential net short exposure. Overall, the large inflows into BITO signal that traditional investment vehicles are showing an increased interest in Bitcoin.
How Do Bitcoin ETFs Impact the Market?
A Bitcoin ETF is a better alternative to buying Bitcoin directly if you don’t want to constantly monitor your crypto investment but want to diversify your investment with a high-risk, high-reward asset. When the Securities and Exchange Commission (SEC) authorized the first Bitcoin futures exchange-traded fund in October 2021, the cryptocurrency market soared beyond $2.5 trillion.
If the bitcoin ETF holds a big portion of the futures market, it may increase price volatility and pose hazards to investors. When futures-based ETFs have a substantial footprint in the underlying asset, history suggests they might aggravate price fluctuations and add to volatility.
The second effect occurs due to calendar rebalancing, in which the ETF gradually sells futures contracts before they expire, causing their prices to decline. At the same time, the price of longer-dated futures contracts rises as the ETF purchases them.
It’s important to note that standard ETFs are not the same as futures ETFs. A normal ETF gives investors exposure to the underlying asset, whereas futures ETF merely lets them wager on the underlying asset’s price (in this case, Bitcoin).
Despite the unpredictability of the market, Bitcoin has managed to gain some ground. In the previous 30 days, the world’s largest cryptocurrency has increased by almost 15%. On the other hand, BTC has gained 1.8 percent in the previous 24 hours and is currently trading at $43,825.63. In contrast, its 24-hour trading volume has increased by 16 percent to $31,476,745,321.
Additionally, the number of high-volume Bitcoin addresses has climbed by 8.3% in the last month. Over 2,000 addresses presently have at least 1,000 BTC according to blockchain data. Besides Bitcoin, there has been an increase in acquiring other high-value crypto assets such as XRP, Aave, and Cardano.