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The first exchange-traded fund (ETF) backed by bitcoin (BTC) futures contracts went live on the NYSE Arca exchange on Tuesday. The launch is considered a success by analysts, with trading volumes indicative of large interest from traders and BTC rallying towards USD 65,000 on Wednesday morning (UTC time).
Launched by ETF issuer ProShares, the ETF with the ticker BITO went live on Tuesday at 09:30 EDT (13:30 UTC), with representatives from ProShares ringing the opening bell at the New York Stock Exchange.
As the market opened, the ETF immediately shot up in price, rising by almost 1.4% within the first five minutes of trading. The first recorded trade for the ETF was made at a price of USD 40.99 per share, with the price rising above USD 42 before reversing to the downside.
Worth noting is also that the bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME) traded sharply higher almost immediately upon the ETF launch, likely as a result of speculation that the ETF will become a large new buyer in the bitcoin futures market.
At 13:47 UTC, shortly after the ETF went live, the CME bitcoin futures contract expiring in October traded at USD 63,855, nearly USD 1,000 higher than the spot price of bitcoin on Binance. Over the past hour, the futures market moved as much as 3.3% higher, while Binance’s spot price moved up by only 1.7%.
At 16:20 UTC, just under three hours into the trading day on Wall Street, the large difference between the spot and futures markets had been reduced, with the CME futures trading USD 400 higher than the spot price on Binance.
At the same time, the BITO ETF itself traded at a price of USD 40.92 per share, down by about 2.8% from the opening trade of the day. On Binance, bitcoin traded at USD 62,540, while bitcoin futures on CME traded at USD 62,940.
With turnover of almost USD 1bn, BITO’s debut ranked only behind a BlackRock carbon fund for a first day of trading, the latter of which ranks higher due to pre-seed investments, according to Athanasios Psarofagis at Bloomberg Intelligence.
Meanwhile, on Wednesday morning, BTC already spiked above USD 64,600, starting to test its new all-time highs (USD 64,805 per Coingecko, USD 64,863, per Coinmarketcap, while Messari claims it was USD 64,654). At 03:13 UTC, BTC trades at USD 63,860 and is up by almost 3% in a day.
The launch of a bitcoin futures ETF has received widespread attention in recent days, with some analysts suggesting that it could fuel rising premiums on bitcoin futures traded on the CME relative to spot prices as seen on crypto-native exchanges. As a result, the ETF has sparked renewed interest in the so-called bitcoin basis trade, where arbitrage traders take advantage of the price difference between bitcoin spot and futures markets.
According to Eric Balchunas, Bloomberg’s senior ETF analyst, the new ETF received a welcome like few others in the market today, already surpassing this year’s top ETF launch by volume, VanEck’s Social Sentiment ETF with ticker BUZZ.
Shortly after, Balchunas said that the ETF has now reached more than half a billion US dollars in trading volume, making it one of this year’s biggest ETF launches by volume.