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Bitcoin futures ETF trading volume is growing

Important facts:
  • BITO is the leading Bitcoin futures ETF by trading volume.

  • The expectation of a Bitcoin “spot” ETF being approved soon is driving this trend.

The uproar sparked by spot Bitcoin (BTC) exchange-traded funds (ETFs) has influenced the rise in prices of not only the digital currency but also related financial instruments.

This is the case with Bitcoin futures ETFs, whose trading volume has increased in recent days.

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In the graphic below, provided by The block, one can observe the increase in trading volume that these ETFs recorded in October. It can be seen that there is a significant increase in the last week of the month.

Bitcoin Futures ETF Trading Volume in October 2023 – Source: TheBlock.

The most famous among the other financial instruments in this area is the traded ProShares Bitcoin Strategy ETF (BITO). $1.7 billion last weekaccordingly exposed by Bloomberg analyst Eric Balchunas.

Trading volume of ProShares Bitcoin Strategy ETF (BITO). Source: Eric Balchunas.

The specialist assured that it was the second busiest week in terms of operating volume “since the wild first week”. This refers to the first week of BITO’s launch in 2021.

Let’s remember this The company’s ProShares ETF was the first to hit the market in the United States, trading more than $1 billion on its first day of listing on the New York Stock Exchange (NYSE), a fact reported by CriptoNoticias.

Balchunas also highlighted the performance of the Grayscale Bitcoin Trust Fund (GBTC). with a volume of 800 million dollarsDuring the last week.

According to the specialist, futures ETFs use “less desirable” methods compared to the more direct investment in Bitcoin that spot ETFs can enable.

The difference between both ETFs is that the spot has an underlying amount of BTC assigned to it, while ETFs based on Bitcoin futures track the price set in a Bitcoin futures contract.

Despite this difference between ETFs, Balchunas says, There appears to be significant investor interest in these futures ETFs of Bitcoin.

However, he believes it is unlikely that Bitcoin spot ETFs will “set records on the first day of trading,” but he stands by it The numbers make it clear that interest in such financial instruments is increasing which is driving the upward trend of Bitcoin futures funds.

When asked why he claims that there will be no record in spot ETFs, as was the case with BITO, Balchunas said replied that we are no longer in 2021 and, unlike BITO, which had a market of its own, “this time several will be launched at the same time, so the volume will be spread out.”

The specialist added that the assets are huge, but so is the volume. In his opinion, a large volume of business is important to attract investors such as hedge funds and financial institutions. This is because high volume indicates that there is interest and movement in this asset, making it more attractive.

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