Bitcoin futures and short ETFs register a huge volume increase on Tuesday

by James · November 9, 2022

Coinbase’s derivatives exchange and ProShares’ bitcoin ETFs hit record trading volumes on Tuesday as crypto volatility increased both before and after Binance revealed its intention to buy rival exchange FTX.

Bitcoin’s price fell on Tuesday and was around $16,750 as of 1:30pm ET Wednesday – down 12% in the past 24 hours. Ethereum was below $1,200 at the time, down about 17% from a day ago.

Amid the price drop, Coinbase saw 588,451 contracts traded on Tuesday, between nanobitcoin and ether futures. The total was the derivatives exchange’s highest since the launch on 27 June this year.

The volumes were far greater than its second highest volume total accounted for by Coinbase derivatives – 361,304 contracts on October 13.

Coinbase’s shares fell over the past 24 hours, mirroring a trend seen across sector stocks as FTX halted withdrawals amid a liquidity crunch. COIN’s price, which is down more than 80% so far in 2022, fell 10% on Wednesday, as of 1:30 PM ET.

Trading volumes for ProShares’ bitcoin ETFs are skyrocketing

The largest bitcoin futures ETF and short bitcoin ETF in the US also had record volumes on Tuesday.

About 49 million shares of the ProShares Bitcoin Strategy ETF (BITO) were traded on Tuesday — 64% more volume than any other day since it launched in October 2021, according to the firm.

BITO’s trading volume passed $1 billion about four hours after they went public just over a year ago. The ETF, which is down about 65% so far this year, had fallen 9% on Wednesday, as of 1:30 p.m. ET.

BITO invests in CME Group’s first-month bitcoin futures contracts. Volumes and open interest for CME Group’s bitcoin futures reached about 49,000 contracts and 14,500 contracts, respectively, up from volumes of nearly 7,000 contracts and open interest of 12,800 contracts the previous day.

Shares in the ProShares Short Bitcoin Strategy ETF (BITI) totaled 7.2 million, ProShares said, representing 366% more volume than the second-highest day.

The fund, which aims to profit from the decline in bitcoin prices by tracking the inverse daily price movements of an index of first-month CME bitcoin futures, launched in June. BITI traded around 870,000 shares on June 22, the second day of trading.

BITI’s price increased by approx. 9.2% Wednesday, at 1:30 p.m. ET. That’s up about 9.6% year-to-date.

Ben Strack

Ben Strack is a Denver-based reporter covering macro and crypto-based funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Before joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local Long Island newspapers. He graduated from the University of Maryland with a degree in journalism. Contact Ben by email at [email protected]