Despite a drop in the bitcoin price during the course of January, exchange-traded funds (ETFs) backed by bitcoin (BTC) futures contracts traded in the US generally maintained their trading volumes last week.
The ProShares Bitcoin Strategy ETF (BITO) – the first bitcoin ETF to go live in the US in October last year – experienced trading volumes of 40.83 million shares during the week of February 7 to 11, according to exchange statistics.
The trading volume is up from the previous week’s 31.53 million shares, and it’s broadly in line with the ETF’s average weekly trading volume of 38.98 million shares since its inception.
Perhaps even more surprising is that, despite bitcoin’s price drop, trading volumes in the second bitcoin ETF to launch, the Valkyrie Bitcoin Strategy ETF (BTF), have climbed dramatically since last year.
According to exchange data, 7.54 million shares of BTF were exchanged during the week of February 7 to 11, the highest level ever. Notably, around the close of last year, the ETF saw a significant increase in trading volume, which has persisted to this day.
In comparison to last year’s average weekly trading volume of 2.52 million shares, BTF’s volume has more than quadrupled this year to 5.3 million shares.
The successful first launch of BITO eclipsed the introduction of BTF, with the second bitcoin ETF trailing considerably behind BITO in terms of volume to this day.
Finally, since the bitcoin price peaked in November last year, the VanEck Bitcoin Strategy ETF (XBTF), the third US-listed bitcoin ETF, has seen a significant increase in volume.
Although the weekly volume for this ETF reached an all-time high of 0.34 million shares shortly after the price peaked, trading volume was back to the same level as recently as January, with 0.25 million shares exchanged in the week of January 17 to 31, according to exchange data.
Bloomberg’s senior ETF analyst, Eric Balchunas, highlighted the remarkable strength in the trading volumes of bitcoin-backed ETFs on Twitter last week, saying that the ETFs “have retained their trading volume and much of their investor base.”
This has happened despite “a brutal 50% drawdown” in the spot market, Balchunas said, calling it “a great sign for [the ETFs] staying power and growth potential.”
Bitcoin ETFs based on spot prices are still a’maybe’ in the United States.
Bitcoin is still the only cryptoasset that may be purchased through ETFs on authorized US stock markets. However, some analysts believe that an ethereum (ETH) ETF may be released soon.
It’s also worth mentioning that, despite tracking mistakes relative to the spot price of bitcoin, the bitcoin ETFs that are now available have managed to sustain strong trading volumes. Contracts for the future often trade at a premium or a discount to the market price of bitcoin, resulting in tracking mistakes.
Furthermore, the ETFs’ futures contracts must be rolled over each month when they expire, adding to the management’s complexity and expenses.