The ProShares Bitcoin Strategy ETF is expected to reach its allowable limit on the number of futures contracts after quickly becoming a bit too popular.
After several days of trading, the ProShares ETF has sold 1,900 October contracts, and the Chicago Mercantile Exchange has set a limit of 2,000 in recent months.
There are 1,400 contracts in November, based on the overall limit of 5,000 contracts. BloombergOne solution may be to provide a longer contract, but this brings the danger of being too far away from the BTC price.
Nate Geraci, president of ETF Store Consulting, commented that the fund may start to deviate from market prices, adding:
“As it goes further on the futures curve, ETFs are forced to gain exposure to Bitcoin prices at higher and higher prices.”
The launch of competing products, such as the Valkyrie Bitcoin Strategy ETF, which will begin trading today, and the VanEck ETF, which is expected to be traded on Monday, October 25, may dilute the demand for ProShares funds.
As Cointelegraph reported, the ProShares ETF became the first ever Assets under management reached US$1 billion in just two daysIt broke the record held by a gold fund 18 years ago, which did this in three games.
Bloomberg senior ETF analyst Eric Balchunas (Eric Balchunas) said that the momentum will still be difficult to stop at this time.
“BITO’s unprecedented early trading volume made it snowball down the hill, because liquidity and assets will generate more liquidity and assets.”
Balciunas think The success of Bitcoin futures products may accelerate the approval of spot Bitcoin ETFs.
“The success of ETFs, general operations, and clear questions about the potential capacity of futures may cause the Securities and Exchange Commission to reconsider or formulate a spot path.”
As Cointelegraph reported on October 18th, Grayscale had anticipated this, and Ready to convert its popular Bitcoin Trust Become a physical support product based on the spot market.