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June 26, 2022
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Bitcoin

Disappointing performance since launch

BITO, which is the first Bitcoin ETF approved in the US, has not performed very well so far.

In fact, it debuted on the markets in mid-October 2021 at a price of around $41 but has now dropped below $30, a loss of 27%.

In the same period, the price of BTC dropped from $63,000 to $47,000, a loss of 25%.

In other words, the BITO price has lost more than the Bitcoin price since its launch.

This happened despite the record highs of the first days it was traded, i.e. days when its price rose from $41 to almost $44, reached on November 10, the same day as the highest high. of all time of Bitcoin.

So, on the one hand, BITO seems to replicate the BTC price trend very well, albeit slightly underperforming.

It is worth mentioning that this is not a bitcoin ETF based on real BTC, but on Futures contracts that replicate the price of BTC.

In contrast, the Canadian Bitcoin Spot ETF (BTCC.B) launched on the Toronto Stock Exchange performed much better. Over the same period, its price dropped from $11.6 to $8.9, a loss of less than 24%.

In other words, the US Bitcoin Futures ETF performed worse than the same Bitcoin price, while the Canadian ETF, backed directly by BTC, performed better than the Bitcoin price.

This difference suggests that if an ETF guaranteed directly on Spot BTC is approved in the US, it could perform better than the “Spot BTC” type.hybrid” currently traded on US exchanges, which is not based on actual Bitcoin, but on futures contracts that replicate its price.

The Grayscale Bitcoin Trust case

In reality, though, the Grayscale Bitcoin Trust (GBTC), which is not a Bitcoin ETF, also performed poorly.

On October 19, its price dropped from around $48 to the current $35, a 27% loss similar to that of BITO.

GBTC is guaranteed on physical BTC, as is BTCC.B, so the performance difference between the latter and BITO may not be due to the underlying. What GBTC and BITO have in common is that they are traded on US markets, while BTCC.B is traded on the Toronto Stock Exchange.

Given this, it is possible to speculate that perhaps the eventual approval of a Spot BTC ETF also in the US may not have the ability to raise the price of Bitcoin, and that US financial markets seem to behave anomalously compared to, for example, the Canadians.

Source: cryptonomist

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