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Dec. 6, 2021, 3:15 p.m. EST

Bitcoin-linked ETF heads for worst day since its October debut, as crypto fights to recover from Saturday swoon

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By Mark DeCambre

The bitcoin futures exchange-traded fund run by ProShares on Monday was on track for its worst day since it made its debut in mid-October, after a rough weekend for crypto.

The ProShares Bitcoin Strategy ETF /zigman2/quotes/230440344/composite BITO -10.22% was trading down 7.5% and headed for its steepest one-day decline since listing on the Intercontinental Exchange /zigman2/quotes/209108507/composite ICE -0.20% -owned New York Stock Exchange Arca platform back on Oct. 19.

The bitcoin futures-backed /zigman2/quotes/211755589/delayed BTC.1 -10.13% ETF had also lost 6.6% on Friday and is down 20% over the past 30-day period, FactSet data show.

The decline for the ETF comes after bitcoin /zigman2/quotes/31322028/realtime BTCUSD -7.27% fell to around $42,000 over the weekend —a nearly 30% drop—and its recovery to $48,000 was still a roughly 8% decline from Friday. 

ProShares’ decline for its bitcoin fund product is mostly in line with other products pegged to crypto. The Valkyrie Bitcoin Strategy ETF /zigman2/quotes/230473388/composite BTF -10.16% , which also uses bitcoin futures, was down 7.9% on the session and down more than 20% over the same period.

Meanwhile, the Grayscale Bitcoin Trust GBTC , which is a trust that tracks bitcoin, was down 7.3% on the session and on track for a more than 20% decline over the past month.

Securities and Exchange Commission Chairman Gary Gensler paved the way for futures backed ETFs last summer when he said that the futures market provides better protections for individual investors, compared against the spot bitcoin market.

Futures are derivative financial contracts that provide investors exposure to price moves in an underlying asset. However, the value of futures contracts sometimes diverge from the underlying asset, which is one of a number of criticisms of a bitcoin futures ETF.

The moves for the bitcoin funds come as the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.48% , the S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.02% and the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -1.54% are attempting to rebound from a withering stretch of trade over the past week, on the back of fears of the spread of omicron and worries about monetary policy.

/zigman2/quotes/230440344/composite
US : U.S.: NYSE Arca
$ 24.15
-2.75 -10.22%
Volume: 3.53M
Jan. 21, 2022 10:17a
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/zigman2/quotes/209108507/composite
US : U.S.: NYSE
$ 125.87
-0.25 -0.20%
Volume: 475,052
Jan. 21, 2022 10:17a
P/E Ratio
23.29
Dividend Yield
1.05%
Market Cap
$71.06 billion
Rev. per Employee
$1.12M
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/zigman2/quotes/211755589/delayed
US : U.S.: CME
$ 38,350.00
-4,325 -10.13%
Volume: 6,371
Jan. 21, 2022 9:05a
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/zigman2/quotes/31322028/realtime
US : CoinDesk
38,381.44
-3,010 -7.27%
Volume: 0.00
Jan. 21, 2022 10:16a
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/zigman2/quotes/230473388/composite
US : U.S.: Nasdaq
$ 14.94
-1.69 -10.16%
Volume: 495,710
Jan. 21, 2022 10:16a
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,547.56
-167.83 -0.48%
Volume: 107.49M
Jan. 21, 2022 10:17a
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/zigman2/quotes/210599714/realtime
US : S&P US
4,436.92
-45.81 -1.02%
Volume: 606.22M
Jan. 21, 2022 10:17a
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/zigman2/quotes/210598365/realtime
US : Nasdaq
13,935.42
-218.60 -1.54%
Volume: 1.11M
Jan. 21, 2022 10:17a
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