The cryptocurrency craze sparked by Bitcoin spot ETFs has yet to subside, and Wall Street institutions have launched enhanced versions of such products.
The Zhitong Finance App learned that the cryptocurrency craze caused by Bitcoin spot ETFs has not subsided, and Wall Street institutions have launched enhanced versions of such products. ProShares, a well-known financial product issuer, launched the Ultra Bitcoin ETF (BITU) and ProShares UltraShort Bitcoin ETF (SBIT), according to a press release. The former tracks Bitcoin's 2X daily earnings performance through the Bloomberg Bitcoin Index, while the latter tracks Bitcoin's reverse performance. The fee rate for both ETFs is 95 basis points.
In January of this year, more than a dozen ETFs directly invested in Bitcoin were successfully listed, attracting a net inflow of 12 billion US dollars and a total asset size of nearly 60 billion US dollars. The proshares two new ETFs stand out in that they offer amplified returns based on spot Bitcoin.
Bitcoin spot ETFs are crazy about attracting gold
The massive inflow underscores the strong demand from investors for spot Bitcoin ETFs. More ETFs are coming soon, including Hashdex Bitcoin ETF (DEFI) and Grayscale Bitcoin Mini Trust.
Michael O'Riordan, founding partner of ETF consulting firm Blackwater (Blackwater), said: “This shows that ETF managers may be a group of speculators trying to capitalize on the positive sentiment of the market as much as possible.”
After regulators approved the launch of an in-stock Bitcoin ETF, new products poured into the market, opening the door for investors to invest. This type of fund highlights the growing demand for cryptocurrency exposure from all types of investors.
Matt Maley, chief market strategist at Miller Tabak+ Co, believes that although the launch of leveraged ETFs is only a “matter of time,” they may be a double-edged sword.
“From a negative perspective, this could lead to increased speculation on an already volatile asset class. However, they will also help investors hedge their positions.” “Overall, it should continue to attract more investors into this asset class.”
Bitcoin price fluctuations explain the growing market demand for leveraged and shorting Bitcoin investment instruments. Although Bitcoin has fallen by about 10% since peaking in mid-March, it is still up 54% since the beginning of this year. This year marks Bitcoin's recovery from the dark years of 2022, when a number of well-known companies crashed and Bitcoin fell 64%, making it the second-worst annual performance on record.
VolatilityShares' 2x Bitcoin Strategy ETF (BITX) has a daily return of twice the S&P CME Bitcoin Futures Daily Roll Index. Since its launch in June last year, BITX has attracted capital inflows every month, attracting 885 million dollars last month alone.