This week, we witnessed the launch of the first-ever Bitcoin-backed exchange-traded fund. Proshare, the fund sponsor, claims that their fund pulled in around $570 million on the very first day of trading. At the start of the day, ProShares Bitcoin Strategy Fund had a seed capital of $20 million. After just a single day of training, the capital shot up to $570 million. On top of that, trading volume on the first day amounts to nearly $1 billion. Proshare’s Bitcoin-backed ETF is now officially the 2nd biggest ETF in terms of trade volume.
The price of the fund went up to $41.94 at the end of the day, moving up 4.9% from the starting net asset value of $40.
According to senior officials from ETF Trends, most of this trading volume is made up of investments from retail investors. Huge ‘block’ trades, a characteristic feature of institutional investors, were few.
Dave Nadig from ETF Trends says that he is not surprised at such high trade volumes on the very first day. According to him, Bitcoin-backed ETFs close down the gap between the average investor and cryptocurrencies. Many people want to invest in crypto but are hesitant to enter the market with a direct purchase of Bitcoin or some other cryptocurrency. For those investors, bitcoin-backed exchange-traded funds are a safe and secure way of entering the crypto market.
The launch of Proshare’s ETF led to a spike in the price of Bitcoin. At $63,839, Bitcoin is slowly inching towards its record of April. Experts predict that it is due to a sudden increased interest in cryptocurrency and bitcoin.