First Bitcoin Futures ETF Trades Nearly $1 Billion in One Day

[Stedsm]

One of the most popular online crypto news portal Decrypt shared an article in which you can find how hungry investors traded the first ever ProShares' Bitcoin Strategy ETF and crossed $280 million in volume in just 20 minutes. As well, storm didn't stop here as the rally in volume continued till it reached nearly $1 billion ($994 million as reported by Bloomberg) on the first day of its trading, being the first ever ETF to cross that mark and breaking all the records in terms of being traded in one day with this huge volume. How do you feel about this?

[franky1]

"fund does not invest directly in bitcoin"

..
translation..
its a FIAT ETF that gambles but never holds an asset that it pretends to be involved in its title

a proper bitcoin ETF collateral trust has not yet been approved

[nibor]

It buys CME Futures... and these settle on day of expiry to the price of bitcoin. So its price WILL move with bitcoin.
https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bitcoin.quotes.html

Only issue is that every month it has to sell the current month and buy the following month - and these are currently about 1% more expensive than spot!

So the ETF will return same as bitcoin less 12-15% per year. So I agree not great - when you can just download some free software and buy the real thing for 0.1% commission!



Remember that for every buyer of a future on CME there is a seller. And those sellers are going to be exposed to the inverse of the bitcoin price. Generally they will hedge this by buying real bitcoins.
So effectively every $1 invested in the ETF means someone else buys $0.98 of bitcoin.

[Lucius]

It is indisputable that the market in the US was waiting for such an instrument, and as we can see, the interest is already very large at the beginning. So even though this is not the type of ETF that most hoped for (physically-backed), I think that the SEC has started to give in to constant rejections and that it will approve a physically-backed ETF next year. The difference between a bet on the price of BTC (futures) and a fund that sells shares based on the actual BTC it buys in the market is really big.

I haven’t commented on this whole situation around BTC prices and the first ETF approved in the US so far - so while some don’t like it, it’s not something we can stop - and time will tell how good or bad it will be for Bitcoin.

[slaman29]

I don't care it's not physical, I don't care it's not moving the market now, I do care that people bought into it so hungrily!

1 billion is a tiny amount compared to everything else sure but this is Day 1. Imagine Day 1000. And when traders are tired of betting on it and just want to secure their financial value on Bitcoin, they will turn to buying the real thing.

[SquirrelJulietGarden]

I haven’t commented on this whole situation around BTC prices and the first ETF approved in the US so far - so while some don’t like it, it’s not something we can stop - and time will tell how good or bad it will be for Bitcoin.

Everything has pros and cons and it can be used for good or evil purposes.

Bitcoin ETF can boil up the market and get people hyped. It will become something normal but in short term, it will be very hot. The Bitcoin market was hot in late of 2017 because of Bitcoin Futures, CME and CBOE. People think Bitcoin Futures will help Bitcoin to rise to hundreds of dollar for one Bitcoin. Only 2 years later, in 2018 and 2019, with more Bitcoin Futures, Bitcoin was in bear market.

I think if it is only Bitcoin ETFs, they can have same effects but the market now is different. More institutions, and the ecosystem now is bigger. Big financial institutes or corporations can think the market is becoming big enough for them to join.

[electronicash]

"fund does not invest directly in bitcoin"

..
translation..
its a FIAT ETF that gambles but never holds an asset that it pretends to be involved in its title

a proper bitcoin ETF collateral trust has not yet been approved

funds not directly invested in BTC but it feels good to see them finally legitimizing Bitcoin.
Valkyrie changed their version of futures ETF to "BTFD" which is cooler.

grayscale news was that they are going to turn their gbtc into BTC ETF SPOT,  funds this time wil be added to the cap. hope the others will do the same.

[dothebeats]

It doesn't really matter much to me, although I have to say that I'm, impressed on the numbers it managed to generate within a day, knowing that this ETF does not concern bitcoin directly, but instead bitcoin futures that is completely different from the cryptocurrency. Perhaps this is just to generate hype for the said ETF in order to garner more traders to participate in trading it, and afterwards the volume will soon go down since it already did what it had to do: get some attention from the people.

[cr1776]

"fund does not invest directly in bitcoin"

..
translation..
its a FIAT ETF that gambles but never holds an asset that it pretends to be involved in its title

a proper bitcoin ETF collateral trust has not yet been approved

Correct.  It is just people betting between each other.  A true "physical bitcoin" ETF will be a game changer.  This is just a weak imitation.  I think it is arguable it is better than nothing, but time will tell.

[franky1]

its only 2% of ACTUAL bitcoin trading.

ofcourse first day markets will be high.. its like the movie industry first week box office numbers are high, then it settles down.

point is that these gambles on futures have nothing to do with the investors actually ever owning or grabbing actual bitcoin. its just betting red or black on a roulette table in essense.

the real drama and actual long term boost to the real bitcoin economy will occur when the real ETF that actually have custody of basket allotments of BTC come to fruition as thats when large trusts then have to buy large amount of bitcoin to fill up their custodian quota's to back the share numbers they want to sell

..
so right now. this futures gambling company is just playing the buzzword game for 15 mins fame and its just temporary headline drama. mostly a bit of pump and dump speculation for a short while.

so yea enjoy the waves for a bit but dont expect massive economic investment into the bitcoin seas. just expect some splashing about for now

[Imran232]

Honestly speaking, when I heard about ETF, I was very skeptical. I didn't understand what this actually was. Why are people saying ETF, ETF with bitcoin pumping? Well, in that case, a YouTuber who shared a video today in our language, and I watched the video with lots of curiosity. And believe me, after hearing about its working process, I know the real meaning of it. And how effective can it be for any financial asset?This is literally a thing that I have become a fan of. I think it could be a backbone for bitcoin's price stability and pumping too. What it already proves And according to your amount that has been traded, you say that if things continue like this, then bitcoin is going to touch an untouchable price very soon. Let's hope for the day.

[DapanasFruit]

I would say that I am not so positive with this ETF but still I am welcoming it because this is one of the many signs that Bitcoin has already arrived into the mainstream of the investing population, so to speak. The strong interest with investing in an ETF speaks volume on the trust and confidence of the said digital asset...and though they are not actually owning any Bitcoin for that matter they will not be coming to a Bitcoin ETF if they think it is not good in the first place. The kind of exposure Bitcoin is getting here including the media frenzy can help a lot in driving the name of Bitcoin into more and more people. As what I can sense from other posters here, there will always be cons and pros...let's see and revisit this issue maybe a year from now and analyze if ETF has been a force for good or bad for Bitcoin in general sense.

[Darker45]

To be quite honest about this, I wasn't expecting the figures to be this high. This is really surprising to me. Months ago, I was even saying this Bitcoin ETF thing is not necessary and has in fact already lost its beauty even before it came out because of the countless rejections. I was very wrong about my assumptions. I was expecting the reception to be relatively poor. I couldn't even feel the same intense hype before when this kind of product became a hot topic. I also considered the fact that this is not even the first Bitcoin ETF in the region. Neighboring Canada has it already.

But, my goodness, this proved to be so huge. This was in fact so much anticipated. And to think that this is just futures and not the spot thing.

[Lucius]

Big financial institutes or corporations can think the market is becoming big enough for them to join.

I would not agree that they think that way, because after all, they are the ones who have the most money, and in some cases, we are talking about the trillions of $ that such companies have under their management. For you and me, the price of 1 BTC is certainly so high that we can't afford to buy even 0.5 BTC without borrowing money from banks - but look at what Saylor (MicroStrategy) does when he buys a few thousand BTC every month.

I think some big players will only be interested in Bitcoin when it comes to their focus because of the incredible growth it is achieving compared to all other possible investments. And as time goes on, all those stories about Bitcoin being some kind of scam are fading more and more - some are starting to realize that phrases like "Probably rat poison squared" and "It's a mirage basically" never made the slightest sense.