Touching a six-month peak near $63,000, Bitcoin surged alongside the unveiling of ProShares Bitcoin Strategy ETF (NYSE: BITO) on Tuesday — the U.S. market’s pioneering bitcoin-related ETF.
Closing the day with a solid 4.65% gain, BITO settled close to $41.80 per share. By 4:02 p.m. ET, shortly after U.S. markets shuttered on Monday, its trading volume had already soared to 23.9 million shares, surpassing $1 billion in value at closing prices, marking one of the highest-profile ETF launches ever recorded.
Orderly Debut and Trading Dynamics
Early impressions from Dave Nadig, ETF Trends’ research head, described BITO’s initial trading phase as “stable” and “well-regulated,” indicating a smooth entry into the market.
BITO’s Investment Mechanism
Rather than holding bitcoin directly, BITO channels investments into bitcoin futures contracts traded on the Chicago Mercantile Exchange. This structural nuance fuels skepticism among some experts who doubt the fund’s potential to significantly sway BTC’s spot price.
Christopher Brendler, managing director at D.A. Davidson, shared in an email to CoinDesk that, “We do not foresee futures ETFs triggering price impacts as pronounced as those stemming from a pure spot Bitcoin ETF.”
Adding a layer of caution, Brendler highlighted contango — a market condition where futures prices surpass spot prices — which may lead to erosion of returns for holders of commodity ETFs focused on futures. He advised, “Investors might sidestep these losses by opting for ETFs that possess actual commodities.”
Snapshot of Key Market Prices
- Bitcoin (BTC): $64,016, +4.42% (Market cap approx. $1.2 trillion)
- Ether (ETH): $3,810, +1.98%
- S&P 500: $4,519, +0.74%
- Gold: $1,769, +0.33%
- 10-year Treasury Yield: Closed at 1.63%
Signs of a Resurgent Bull in Bitcoin
In spot markets, Bitcoin displayed firm demand, climbing roughly 3% over 24 hours. This momentum followed rapid absorption of a hefty sell order on the OKEx exchange during Asian trading hours, as reported by CoinDesk’s Lyllah Ledesma.
Market behavior hints at the dawn of another bullish wave. Last week, BTC notched its highest weekly close in history, topping $61,500 as of April 6 — a trend Delphi Digital characterized as “one of the most decisive surges since January 2021.”
BTC Options Market Sees Uptick
Expectations surrounding the bitcoin futures ETF launch have sparked heightened activity in BTC options, with trading volumes climbing to $1.5 billion last week.
Glassnode’s analysis reveals that such elevated options trade volume has occurred only thrice before this year, all during price intervals near $60,000 between March and May. Most of these positions consist of call options, granting holders the right to buy BTC at predetermined prices in the future.
Strong open interest clusters at call strikes exceeding $100,000 expiring by year-end mirror widespread market optimism, Glassnode notes.
Altcoin Developments Spotlight
- DraftKings Joins Polygon as Validator: The sports betting titan is gearing up to back Polygon’s blockchain, aiming to facilitate bespoke NFTs and secondary sales. This alliance extends to governance participation, allowing DraftKings token stakers to propose network changes. Polygon anticipates governance involvement to commence within the next month.
- Facebook’s Novi Wallet Launches with Paxos Stablecoin: Novi’s debut enables users in the U.S. and Guatemala to trade the Paxos Dollar (USDP$1.0002) in a trial phase, courtesy of custody services furnished by Coinbase. Facebook’s Diem stablecoin, formerly known as Libra, remains pending regulatory sign-off before integration with Novi.
- Sequoia Games Integrates Augmented Reality Using Algorand Blockchain: Algorand underpins Sequoia’s new NBA-licensed board game, Flex NBA, marrying physical collectible tiles (“Flexagons”) with NFTs to craft immersive AR experiences — a cutting-edge fusion of blockchain and gaming.
News Highlights
- Binance Demand Surge Key to Bitcoin’s Rally — Kaiko Report
- Grayscale Moves to Convert Bitcoin Trust Into ETF via SEC Filings
- Riot’s Strategy to Boost Hashrate Without Increasing Miner Count
- Chainalysis Incorporates Bitcoin on Its Balance Sheet
Performance in Broader Markets
The majority of digital assets tracked in the CoinDesk 20 closed higher.
Standout performers as of 21:00 UTC (4:00 p.m. ET) included:
- Aave (AAVE) at $297.89, gaining +1.57%
- Bitcoin Cash (BCH) at $578.80, up +1.16%
- Filecoin (FIL) at $2.44, edging +0.43%
Lagging assets included:
- Dogecoin (DOGE) slipping to $0.2404, down -3.33%
- Algorand (ALGO) retreating by -3.05%
- Polygon (MATIC) sliding -2.96% to $0.2840
