First Mover Americas: ProShares Dismisses Concerns Over Cost of Tracking Futures
The latest price moves in crypto markets in context for July 21, 2023.
This article originally appeared in , CoinDesk’s daily newsletter putting the latest moves in crypto markets in context..
ProShares, the issuer of the first U.S. bitcoin futures-linked exchange-traded fund (ETF), said concerns that costs associated with trading of the derivatives would lead to. The ProShares Bitcoin Strategy Fund began trading on the New York Stock Exchange in October, 2021, allowing investors to gain exposure to bitcoin (BTC) without having to actually own the cryptocurrency. The ETF, the world's largest crypto fund, invests in regulated and cash-settled bitcoin futures listed on the Chicago Mercantile Exchange (CME). From the very beginning, observers speculated BITO and other futures-based ETFs would significantly underperform bitcoin due to costs associated with rolling over, or selling expiring futures contracts and buying the next set. "Concerns about the roll costs are misguided; BITO has closely tracked bitcoin's price since inception," Simeon Hyman, global investment strategist at ProShares, told CoinDesk in an email interview.
Cryptocurrencies slid Thursday with bitcoin (BTC) dipping to as low as $29,593 during U.S. afternoon hours, near its . Ether (ETH) buckled below $1,900 to change hands 1% lower than 24 hours before. LINK, the native token of the Chainlink ecosystem, defied the slump and was the only crypto asset with sizable gains among the 40 largest tokens by market capitalization. The token surged 15% through the day, rising above $8 for the first time in nearly three months after Chainlink released this week an interoperability protocol that facilitates communication between blockchains and banks, tested by interbank communication system Swift. Ripple’s XRP pared some of its impressive gains from previous days, dropping some 6% in 24 hours. The token’s price almost doubled to 93 cents a week ago, following a partial court victory against the U.S. Securities and Exchange Commission (SEC).
Coinbase Borrow, a program that allowed customers to receive regular currency loans of up to $1 million against their bitcoin (BTC) holdings, . The company will instead focus its resources on products that “customers care about most,” a spokesperson told CoinDesk. Customers who hold loans through the program have until Nov. 20 to pay back any outstanding loan balances. Coinbase said in May that it was not allowing Coinbase Borrow customers to take out new loans as part of a regular process of re-evaluating its products. The exchange has been under increased scrutiny from U.S. regulators, specifically the Securities and Exchange Commission (SEC), for its operations in the U.S., and has been doubling down on its businesses elsewhere.
- Omkar Godbole
UPDATE (July 21, 13:00 UTC): Rewrites headline.
Edited by Sheldon Reback.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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1. Cross-asset performance diverged this week. Between the October 30 and November 6 closes, the S&P 500 fell 2.68%, the Nasdaq 100 dropped 4.91%, and BTC lost 1.88%. Gold and silver rose 4.51% and 5.79%, respectively, while the Hang Seng gained 5.10%. Sharp declines in crude oil and some Asian equity indexes showed how differently assets responded to growth, policy, and event risks. 2. Democrats won majorities in both chambers of Congress in the US midterm elections, and markets rallied before reversing. We focus on actual changes in fiscal negotiations, key committee arrangements, and local industrial policy, especially data-center approvals, energy costs, and the pace of capital expenditure. We do not map party outcomes directly to asset direction. 3. The pullback in technology stocks has put returns on AI investment under renewed scrutiny. Whether rapid growth can cover financing, construction, and ongoing compute costs is becoming a key valuation test. For related positions, monitor policy implementation, customer capital expenditure, and cash collection together, and do not read a one-day rebound as a sign that the pressure has passed. 4. Anthropic's IPO preparations are putting the growth quality, operating profitability, and funding needs of AI model companies under public-market scrutiny. Valuations discussed for the offering are not final pricing, and participating in related products also requires assessing fees, allocation methods, asset rights, and trading restrictions. Assets in focus: BTC, the Nasdaq 100, crude oil, and gold, along with key earnings from companies including CSCO, AMAT, and CEG
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