ProShares Bitcoin ETF trading declined over 70% since spot Bitcoin ETF launch

ProShares’ Bitcoin Strategy ETF experiences a significant drop in trading activity as investors shift focus to spot Bitcoin ETFs.

On Jan. 18, trading volumes for BITO on the New York Stock Exchange fell sharply to just above $500 million, a significant decrease from the $2 billion peak seen on Jan. 11, per Coinbase’s data. Additionally, data from ETF.com shows a substantial outflow from BITO, exceeding $270 million, within the same timeframe. Despite this downturn in trading activity, market analysts maintain a positive outlook on BITO’s role in the sector, particularly as a hedging tool.

The preference for spot Bitcoin ETFs over futures-based options like BITO is increasingly evident. This shift is attributed to the inherent mechanism of BITO, which requires the rolling over of futures contracts, leading to additional costs that adversely affect its long-term performance. 

In stark contrast, the first week following the launch of 11 spot Bitcoin ETFs saw a remarkable $14 billion in trading volume, surpassing the total for all ETFs launched in 2023. These spot ETFs collectively attracted over $1.2 billion in investments in their inaugural week, highlighting their growing popularity among investors.

Currently, Bitcoin is the second largest ETF market in the U.S., based on assets under management, surprising silver.