Bitcoin-linked ETF heads for worst day since its October debut, as crypto fights to recover from Saturday swoon

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On Monday, the ProShares-powered bitcoin futures exchange-traded fund was on track for its worst day ever since its debut in mid-October after a rough weekend for crypto.

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ProShares Bitcoin Strategy ETF BITO,
-7.82%
The Intercontinental Exchange was trading down 7.5% and headed for its biggest single-day drop since listing on ICE.
+0.22%
-Proprietary New York Stock Exchange Arca Platform back on October 19th.

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bitcoin futures supported BTC.1,
-8.02%
FactSet data shows, the ETF was also down 6.6% on Friday and is down 20% in the past 30-day period.

After Bitcoin BTCUSD ETF has declined,
-0.25%
It fell to around $42,000 over the weekend – a drop of almost 30% – and its recovery to $48,000 was still a drop of about 8% from Friday.

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ProShares’ decline for its bitcoin funds product is mostly in line with other crypto-related products. Valkyrie Bitcoin Strategy ETF BTF,
-7.89%,
Which also uses bitcoin futures, was down 7.9% in the session and more than 20% in the same period.

Meanwhile, Grayscale Bitcoin Trust GBTC, a trust that tracks bitcoin, was down 7.3% in the session and was on track to drop more than 20% in the past month.

Securities and Exchange Commission Chairman Gary Gensler paved the way for futures-backed ETFs last summer when he said that the futures market offers better protection for individual investors than the spot bitcoin market.

Futures derivatives are financial contracts that provide investors with exposure to price movements in an underlying asset. However, the value of futures contracts sometimes diverges from that of the underlying asset, which is one of the many criticisms of bitcoin futures ETFs.

Bitcoin Fund’s Move Comes as Dow Jones Industrial Average DJIA,
+1.85%,
s&p 500 index spx,
+1.22%
and Nasdaq Composite Index Comp,
+0.98%
Omicron has been attempting to rebound from a withered segment of trading over the past week, due to spread fears and concerns about monetary policy.

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