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World's first bitcoin ETF down 70% as investors lose $1 billion

 


The world's first Bitcoin ETF was launched in the US a year ago with great media coverage. At this time, the Bitcoin price was close to the last all-time high. Since then, however, its price has plummeted. As a result, investors have lost more money on this ETF than on any other debut ETF.


When it launched in late October last year, ProShare's Bitcoin Strategy Fund (BITO) quickly attracted over $1 billion in investor funds. This made him one of the most successful new ETF debutants ever.


Now, a year later, the exchange-traded fund's price is down 70% from its peak, according to data from Morningstar Direct . This makes it the ETF with the sixth worst performance since its launch.


Bitcoin ETF loses more money than any other ETF

The Bitcoin fund attracted a lot of attention prior to its launch in the US when the Securities and Exchange Commission (SEC) approved it. Prior to BITO, the country's securities regulator had denied any other application for a Bitcoin-based ETF .


The SEC approved BITO because it is based on Bitcoin futures products and not the cryptocurrency itself . That's why it offers consumers more security, according to SEC Chairman Gary Gensler.


This novelty of the American Bitcoin ETF contributed significantly to the unprecedented number of subscriptions, which, however, are now leading to massive losses. Despite continuous inflows totaling $1.8 billion over the past year, the ETFS currently has a value of just $624 million in assets under management.


Morningstar Direct analysis shows that this Bitcoin fund has lost more investor money in a year than any other ETF. While other crypto ETFs have lost more value, none have had such a large initial capital investment.


Crypto trading volume is flat

According to data from CoinShares , year-to-date net inflows into digital investment products like BITO totaled $480 million. The latest report suggests trading volumes in these assets have been flat since the summer. Last week was no exception, with volume hitting a two-year low of $758 million, compared to $7 billion a year ago.


The report also showed that bitcoin-based products saw inflows for the sixth consecutive week, albeit just $4.6 million. On the other hand, short bitcoin-based products saw $7.1 million in outflows. As a result, total net inflows turned negative.


According to the report, these products were the only ones to show consistent activity recently. For example, short BTC-based products saw $15 million in outflows in October. That's about 10% of the value of all managed bitcoin short products.


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