Trading Volume on Proshares Bitcoin ETF Tanks 75% As Focus Shifts To Spot ETFs

Trading activity for the ProShares Bitcoin Strategy ETF, known as BITO, has seen a significant decline of 75% since the launch of spot ETFs directly investing in bitcoin. While BITO remains an important hedging instrument in the market, its trading volume has dropped to just over $500 million on the NYSE, compared to a record $2 billion on January 11th. On the other hand, spot ETFs have registered a cumulative trading volume of $14 billion in their first week, attracting over $1.2 billion in investor funds. These spot ETFs are seen as a better alternative to futures-based ETFs like BITO, as they offer exposure to bitcoin without the need for storing the cryptocurrency. However, because BITO invests in CME BTC futures, it still holds relevance due to its cash-creation structure. Authorized participants (APs), who create and redeem ETF shares, may rely on regulated products like BITO to hedge their positions and protect against bitcoin price fluctuations. Despite the decline in volume, BITO is expected to remain an integral part of the bitcoin ETF space, especially for APs who prefer regulated hedging options such as long CME futures or long BITO.