ProShares Bitcoin Strategy ETF assets peak at $2 billion – 90% of BTC supply in profit

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ProShares Bitcoin The Bitcoin futures exchange-traded fund Strategy ETF (BITO) has amassed more than $2 billion in assets, hitting an all-time high.

Simeon Hyman, global investment strategist at ProShares, said that when the market closed on January 8, the fund had assets of $2,010,057,946. He added that BITO was up 10% last week from $1.8 billion on January 2, and 18% last month from $1.7 billion on December 9, 2023.

“Many have pointed to speculation about spot Bitcoin ETFs as a bullish factor for Bitcoin, but it should be noted that even in the face of crypto-related banking issues in March, rising interest rates and other challenges for Bitcoin exchanges “.”

“At the same time, growing interest in Bitcoin suggests that short-term exposure to the cryptocurrency can be challenging and costly. BITI and SETH are futures-based short Bitcoin and short ETH ETFs, respectively, currently available in brokerage accounts and is the only ETF in the United States available to investors looking to profit when the price of Bitcoin or Ethereum declines.”

In December 2023, Cathie Wood’s Ark Invest sold more than $200 million worth of Coinbase shares through its ETF. The company acquired BITO in late December for $92 million.

The daily trading volume of BITO on January 8 was US$811.13 million.

90% of Bitcoin supply is profitable

CryptoQuant data shows that nearly 90% of the Bitcoin supply is in profit, and Bitcoin ETF prices exceeded $46,000 on Tuesday, amid growing expectations for a Bitcoin ETF to be approved in the United States. This number is up from less than 50% at the beginning of last year.

Source: CryptoQuant

Bitcoin is up nearly 160% in 2023 and has soared 50% in the past six months, largely on expectations of the U.S. Securities and Exchange Commission approving an ETF. The sudden rise in prices resulted in many HODLers (slang for long-term investors) becoming profitable.

For example, El Salvador recently reported a $13 million profit on its Bitcoin investment as a result of this bull run.

However, CryptoQuant analysts warned in a recent report that high unrealized profits from Bitcoin holders increase the risk of a significant price decline. This could happen even as demand grows for Grayscale Bitcoin Trust (GBTC), which has applied for approval to convert to an ETF, narrowing the discount between GBTC’s share price and NAV, while growing trading volumes suggest interest in the spot ETF approval is strongly anticipated.

CryptoQuant scenario exhibit If Bitcoin reaches $48,500 (the average price that holders have held for about 2-3 years), the market may see a correction, with potential support at $34,000 and $30,000, with a 10% to 20% decline.