Bitcoin futures ETF opens with gain, explosive trading volume

About 6.4 million shares of the exchange-traded fund, worth roughly $264 million, changed hands in the first 20 minutes of trading.

After years of delays and setbacks, the first Bitcoin-linked exchange-traded fund in the U.S., the ProShares Bitcoin Strategy ETF, made its debut Tuesday, marking a watershed moment for the crypto industry.

The fund — trading under the ticker BITO — rose as much as 5.4% to $42.15 before paring gains. It had been long-awaited by both the crypto community and investors on Wall Street, many of whom have argued for years that a Bitcoin-centric exchange-traded fund was overdue.

The ProShares fund is based on futures contracts and was filed under mutual fund rules that SEC Chairman Gary Gensler has said provide “significant investor protections.”

Just 20 minutes into its trading premiere, about 6.4 million shares of BITO worth roughly $264 million had changed hands, according to data compiled by Bloomberg.

Meanwhile, Bitcoin gained as much as 3.1% to trade around $63,274, slightly below its April record highs of just under $65,000.

“It’s an incredibly bullish week — there’s been really positive sentiment around the ETF in particular,” said Sam Bankman-Fried, chief executive of exchange FTX.

It’s long been assumed that whichever fund received approval first could stand to reap the greatest benefits — including industry recognition as well as potentially attracting huge amounts of cash. Some analysts are already bullish on BITO’s prospects — the futures-based Bitcoin ETF could attract more than $50 billion in inflows in its first year given the hype around it, predicted noted Bitcoin bull Tom Lee, co-founder of Fundstrat Global Advisors.

There are other applications for futures-based Bitcoin ETFs in the queue. Analysts are anticipating launches from issuers such as Valkyrie, whose Bitcoin Strategy exchange-traded fund, due to debut on Wednesday, will now trade under the ticker BTFD.

Meanwhile, Grayscale Investments and the New York Stock Exchange filed to convert the world’s biggest Bitcoin fund (GBTC) into an ETF, appealing to regulators for approval just as its wildly popular vehicle is beset with competition.

Market-watchers have a few measuring sticks with which to gauge BITO’s initial reception. The SPDR Gold Shares fund (GLD) had the fastest-ever climb to $1 billion in assets under management, reaching the landmark in just three days, according to Bloomberg Intelligence. More recently, the VanEck Social Sentiment fund (BUZZ) saw more than $400 million worth of shares traded on its debut earlier this year, one of the highest amounts ever for an ETF on its first day.

Bloomberg News reported last week that the Securities and Exchange Commission wasn’t going to stand in the way of the launch of a futures-backed Bitcoin fund.

Gensler has been viewed as being more open-minded about crypto than his predecessor, Jay Clayton. Observers cite Gensler’s previous interest in the crypto world — he once taught a class at MIT’s Sloan School of Management called “Blockchain and Money.” And over the summer, Gensler had signaled that regulators might be more open to a Bitcoin ETF if it were based around futures rather than the cryptocurrency itself.

[More: First US Bitcoin-linked ETF raises concerns for advisers]