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ProShares Bitcoin ETF Reaches Same Net Asset Value as Canadian ETFs in Two Days

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Tue, 10/26/2021 - 10:51
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Arman Shirinyan
While having some underlying problems, ProShares Bitcoin ETF is already showing significant results
ProShares Bitcoin ETF Reaches Same Net Asset Value as Canadian ETFs in Two Days
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Bitcoin futures-based exchange-traded fund by ProShares has breached the $1 billion Assets Under Management mark and become the fastest ETF to do so in the history of the investment products, according to Kaiko.

Two-day-old ProShares ETF AUM reaches Canadian funds

While ProShares products are the first Bitcoin ETF in the United States, Canada already had several Bitcoin ETFs trading on the Toronto Stock Exchange. On a chart provided by Kaiko, we can see that the Net Asset Value of the U.S.-based ETF has reached the $1 billion mark and come closer to the investment products based in Canada that have been trading since February and April of this year.

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The main difference between the two funds is that Canadian ETFs are actually holding Bitcoin instead of creating synthetic exposure to the cryptocurrency by holding short-term Bitcoin futures contracts. Currently, only two funds have a greater Net Asset Value compared to ProShares: 3iQ and Purpose Bitcoin ETFs. 

Since the ProShares product is one of the first offerings on the U.S. market, we will likely see more diversity in investors' choices once more Bitcoin-related products become available on the U.S. market.

Problems with Bitcoin futures ETFs

While investors expressed significant interest in the newly dropped investment products, some analysts remain skeptical toward the futures-based ETF. The main problem with funds that grant exposure to the market through futures contracts is the high cost of holding such a product due to a "contango bleed."

With futures trading at a premium compared to spot assets, some investors may experience losses that they are unable to avoid while trading futures-based ETFs. On the contrary, physically-backed ETFs do not have such a problem since exposure to the market is achieved by holding an actual asset.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.