Bitcoin ETF Launch Hype Dwindles as Funds Slide in Worth
The Slump in Bitcoin Futures ETFs Continues
Finally, after the first US bitcoin futures, ETF was approved, Proshare's bitcoin futures ETF debuted with a bang, grabbing about $1 billion in total volume in its first 24 hours. Months later, on January 13, 2022, the Proshares Bitcoin Strategy ETF (BITO) is trading for $26.96, down 39.12 percent from its November 10, 2021 peak of 44.29.
In mid-November, Bloomberg contributor Katherine Greifeld stated that the ‘bitcoin futures ETF mania is receding.’
"While the Proshares fund swallowed $1.1 billion in two days – the fastest an ETF has ever done so," Greifeld noted at the time.
The financial author went on to examine the Vaneck ETF, pointing out that the fund's lower management fees could set it apart from the competition. At the time, Greifeld quoted Bloomberg Intelligence senior ETF analyst, Eric Balchunas, who said:
“There’s definitely a lull going on right now relative to the launch mania and so Vaneck has their work cut out for them in trying to get people excited again.”
Valkyrie's BTF is Down 37%, Vaneck's XBTF is Down 27%, and the Total Open Interest in Bitcoin Futures Across Cryptocurrency Exchanges is Down More Than 38%
The Valkyrie Bitcoin Strategy ETF (BTF) experienced the same thing when it hit an all-time high (ATH) of $26.67 per share on November 9, 2021, and now trades at $16.70 per unit, down 37.38 percent from the ATH.
The Vaneck Bitcoin Strategy ETF (XBTF) is down only 27.70 percent from its peak of $58.08 per unit on November 19, 2021, to its current price of 41.99 per unit. Despite the fact that Proshares and Valkyrie ETFs were launched before Vaneck, they all show a significant correlation with the spot price of bitcoin and the crypto asset's futures markets.
Open interest in futures markets has decreased since mid-November, as has total bitcoin futures open interest across cryptocurrency exchanges. The largest open interest in bitcoin futures was approximately $28 billion on November 11, 2021.
The total open interest on most major derivatives markets is currently $17.22 billion. That's a 38.50 percent drop in the last two months, and the pattern looks a lot like bitcoin's spot market price behavior.