One year after its historic debut, the world's first exchange-traded fund tracking the price of bitcoin has lost more money than any other ETF debut.
In October 2021, asset manager ProShares launched its Bitcoin Strategy fund, which quickly became the most successful new ETF in history, amassing more than $1 billion in its first week of trading on the New York Stock Exchange.
Bitcoin supporters celebrated the launch as the point at which cryptocurrency entered the world's largest equities market and became integrated into mainstream investment strategies for retail and institutional buyers alike.
However, just one year in, the fund has lost money on an unprecedented scale, according to Morningstar Direct data. Its 70% share price drop also ranks it as the sixth-worst performing debut ETF of all time, putting investors to the test during what has become known as the "crypto winter."
The ETF, known as BITO, has consistently attracted inflows, with only minor withdrawals. Despite net inflows of $1.8 billion in its first year, its assets now total $624 million. Morningstar calculates that BITO has lost $1.2 billion in investor money due to the timing of inflows and the 70% drop in the fund's equity price, making it by far the biggest debut loser.
According to ProShares, "BITO has closely tracked bitcoin since launch, which is what we believe our shareholders want from the fund." At the time of the BITO launch, ProShares chief executive Michael Sapir said it was a milestone for the $8.4tn ETF industry, on a par with the first US equity fund in 1993, the first fixed income fund in 2002 and the first gold fund in 2004. BITO’s wildly anticipated launch helped push the price of bitcoin from $63,000 on launch day to record highs close to $70,000.
