VanEck Bitcoin Strategy ETF Launches with a Fraction of BITO's Trading Volume

The VanEck Bitcoin Strategy ETF (XBTF) closed its first day of trading on Nov. 16 with "substantial" volume, but it pales in comparison to similar products that have launched.

Bitcoin futures ETFs provide investors with exposure to the underlying future price of Bitcoin without forcing them to hold any Bitcoin themselves.

According to investing.com, XBTF had approximately $9.5 million in assets under management (AUM) and a daily trading volume of approximately $4.6 million as of the close of trading on the Chicago Board Options Exchange (CBOE). That’s just a fraction of the $1 billion in trading volume that ProShares Bitcoin Strategy (BITO) recorded on its NYSE debut on Oct. 19. Since then, BITO's total trading volume has reached the top 2% of all ETFs.

Tommy Horan, head of corporate partnerships at Australian exchange Swyftx, said it was a "pretty low launch" but that VanEck wouldn't be too concerned. Their (lower) fees should attract steady inflows next quarter.

"After all the hype surrounding ProShares' $1.1 billion first-day volume, this is always going to be a disappointment and continues the trend we've seen with Valkyrie's ETF."

The Valkyrie Bitcoin Futures ETF also had a relatively underwhelming launch, with the BTF’s price falling 3% in the first hour of trading on Nasdaq on Oct. 22 despite $78 million in trading volume.

Bloomberg's senior ETF analyst Eric Balchunas said in a tweet on Nov. 17 that XBTF's trading volume would normally be quite good, but it pales in comparison to BITO.

XBTF had around $5 million in trading volume on its first day of listing. Normally that would be pretty good, probably in the top 10% of ETFs launched this year. Just dwarfed by BITO's $1 billion, let alone BTF's $78 million.

— Eric Balchunas (@EricBalchunas) November 16, 2021

The decline in XBTF trading volumes came after the U.S. Securities and Exchange Commission (SEC) rejected VanEck’s application for a spot bitcoin ETF. Unlike a futures ETF, a spot ETF would allow investors to gain exposure to the current price of bitcoin without owning bitcoin.

Overall, Horan applauded the launch of the XBTF, but said that until the spot ETF is approved, the cryptocurrency ETF will not exert a lot of strength: "Seeing crypto funds get regulatory approval is a great thing for the industry. That's a good thing, but until the spot ETF is approved, no one will be able to break through."

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