{"id":33159,"date":"2022-10-26T05:06:02","date_gmt":"2022-10-26T05:06:02","guid":{"rendered":"http:\/\/egrowonline.com\/?p=33159"},"modified":"2022-10-26T05:06:02","modified_gmt":"2022-10-26T05:06:02","slug":"first-bitcoin-etf-loses-record-amount-in-its-initial-year","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=33159","title":{"rendered":"First bitcoin ETF loses record amount in its initial year"},"content":{"rendered":"


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One year after its record-breaking launch, the world\u2019s first exchange traded fund tracking the price of bitcoin has lost more of investors\u2019 dollars than any other ETF debut.<\/p>\n

Asset manager ProShares launched its Bitcoin Strategy fund in October 2021, and it immediately became the most successful<\/a> new ETF in history, amassing more than $1bn in its first week of trading on the New York Stock Exchange.<\/p>\n

Bitcoin enthusiasts proclaimed the launch as the moment when crypto joined the world\u2019s biggest equities market and became enmeshed in mainstream investment<\/a> strategies for retail and institutional buyers alike. <\/p>\n

But one year into its existence, the fund has lost money on an unprecedented scale, according to data from Morningstar Direct for the Financial Times.<\/p>\n

Its 70 per cent share price drop also makes this the sixth-worst performing debut ETF<\/a> of its kind of all time, in a test for investors during what has become known as the \u201ccrypto winter\u201d.<\/p>\n

\u201cWe\u2019ve seen funds nosedive right out of the gate in this manner, but rarely do they attract so much in assets so soon after launching like [this] did,\u201d said Jeffrey Ptak, chief ratings officer at Morningstar Research Services.<\/p>\n

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The ETF, known as BITO, has attracted inflows consistently through its life, with only light withdrawals. But even with net inflows of $1.8bn in its debut year, its assets now stand at $624mn. Taking together the timing of inflows and the 70 per cent drop in the fund\u2019s equity price, Morningstar calculates that BITO has lost $1.2bn of investors\u2019 money, making this by far the biggest debut loser.<\/p>\n

Other ETFs have fallen further in their first year, but they have all been far smaller. The Global X Blockchain ETF (BKCH) \u2014 another crypto-related fund \u2014 plummeted 76.7 per cent in its first year of operation to July, but it peaked at $125mn of assets and now holds just $60mn.<\/p>\n

ProShares said in a statement that \u201csince launch, BITO\u00a0has closely tracked bitcoin, which is what we believe our shareholders want from the fund\u201d.<\/p>\n