Third Bitcoin ETF Debuts Amid Fading Enthusiasm

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In Brief
  • VanEck’s Bitcoin futures ETF became the third listed on US markets when it launched earlier this week.

  • The release comes after several weeks’ delay and just days after the rejection of VanEck’s physically-backed product.

  • The release comes after several weeks’ delay and just days after the rejection of VanEck’s physically-backed product.

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VanEck’s Bitcoin futures ETF (XBTF), the third listed on US markets, has debuted amid fading enthusiasm for such products.

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XBTF started trading on the Chicago Board Options Exchange (CBOE) at 9:30 am EST on November 16. The release comes after several weeks’ delay and just days after the rejection of VanEck’s physically-backed product. Although the first Bitcoin-based ETF debuted just last month, it seems to have absorbed most of the pent-up demand. 

In fact, the ProShares Bitcoin Strategy ETF (BITO) had been so successful that capacity among futures commission merchants had reached their limits. This is what caused the delay of VanEck’s ETF, which had originally been expected to debut in October. The launch of XBTF also comes just days after the US Securities and Exchange Commission rejected the firm’s proposal for an ETF offering direct exposure to Bitcoin. 

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Fading enthusiasm

Market proponents had waited years for a Bitcoin-based ETF, and so demonstrated their devotion upon the release of the first one last month. Within two days of its debut, BITO became the quickest ETF to accrue $1.1 billion. 

However, since then, figures indicate that the market for such products may have been largely satisfied. Over the past several weeks, assets have drifted between $1.3 and $1.4 billion, while Valkyrie’s Bitcoin Strategy ETF (BTF) gained only $60 million despite its debut just days after BITO.

“There’s definitely a lull going on right now relative to the launch mania and so VanEck has their work cut out for them in trying to get people excited again,” said Bloomberg Intelligence senior ETF analyst Eric Balchunas. While XBTF charges a lower management fee than the other two funds, he said “the low cost could help a bit, although I don’t see this as a price-sensitive investor base quite yet.”

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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