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SVTPerformance's Chain of Restaurants
Road Side Pub
BITCOIN
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<blockquote data-quote="Weather Man" data-source="post: 16683918" data-attributes="member: 137766"><p><a href="https://seekingalpha.com/news/3756307-proshares-bitcoin-strategy-etf-may-be-in-jeopardy-of-exceeding-futures-contracts-limit" target="_blank"></a></p><p><a href="https://seekingalpha.com/news/3756307-proshares-bitcoin-strategy-etf-may-be-in-jeopardy-of-exceeding-futures-contracts-limit" target="_blank">ProShares Bitcoin Strategy ETF may be in jeopardy of exceeding futures-contracts limit</a></p><p></p><p></p><ul> <li data-xf-list-type="ul">Red-hot ProShares Bitcoin Strategy ETF (NYSEARCA:<a href="https://seekingalpha.com/symbol/BITO" target="_blank">BITO</a>) is garnering too much interest too quickly, as the ETF is reportedly on track to exceed the amount of futures contracts allowable to have by the Chicago Mercantile Exchange.</li> <li data-xf-list-type="ul"><a href="https://www.bloomberg.com/news/articles/2021-10-21/bitcoin-etf-is-already-in-danger-of-breaching-a-limit-on-futures?srnd=etfs" target="_blank">Bloomberg</a> reported that after just two days of trading, BITO already owned about 1,900 contracts -- just under the 2,000 contracts that the CME says a single entity can hold. BITO also has accumulated 1,400 November contracts totaling 3,400 contracts.</li> <li data-xf-list-type="ul">At the rate of increase BITO is witnessing, it already has some $1.1B in assets under management and is approaching the 5,000 maximum total contracts that the CME allows.</li> <li data-xf-list-type="ul">According to <a href="https://www.cmegroup.com/education/bitcoin/cme-bitcoin-futures-frequently-asked-questions.html" target="_blank">the exchange's rules</a>, spot-position limits "are set at 2,000 contracts. A position accountability level of 5,000 contracts will [also] be applied to positions in single months outside the spot month and in all months combined."</li> <li data-xf-list-type="ul">Bloomberg noted that one solution for ProShares is to have its holdings drag out to longer contract dates. However, the issue then is that the futures contracts could start to disjoint themselves from the actual price and performance of Bitcoin (<a href="https://seekingalpha.com/symbol/BTC-USD" target="_blank">BTC-USD</a>).</li> <li data-xf-list-type="ul">Nate Geraci, President of the ETF Store, told the news agency that "the end result is the ETF will start taking on potentially significant tracking error versus the spot price of Bitcoin."</li> <li data-xf-list-type="ul">Another solution could actually come from competitor Bitcoin-futures ETFs. As more and more such funds hit the market, BITO's competitors could soak up the heavy demand.</li> <li data-xf-list-type="ul">The Valkyrie Bitcoin Strategy ETF (NASDAQ:<a href="https://seekingalpha.com/symbol/BTF" target="_blank">BTF</a>) <a href="https://seekingalpha.com/news/3755603-vaneck-bitcoin-strategy-etf-to-challenge-proshares-bitcoin-strategy-etf" target="_blank">is set to come to market on Friday.</a></li> <li data-xf-list-type="ul">Similarly, the rival VanEck Bitcoin Strategy ETF (BATS:<a href="https://seekingalpha.com/symbol/XBTF" target="_blank">XBTF</a>) <a href="https://seekingalpha.com/news/3755603-vaneck-bitcoin-strategy-etf-to-challenge-proshares-bitcoin-strategy-etf" target="_blank">appears likely to start trading on Monday.</a></li> </ul></blockquote><p></p>
[QUOTE="Weather Man, post: 16683918, member: 137766"] [URL='https://seekingalpha.com/news/3756307-proshares-bitcoin-strategy-etf-may-be-in-jeopardy-of-exceeding-futures-contracts-limit'] ProShares Bitcoin Strategy ETF may be in jeopardy of exceeding futures-contracts limit[/URL] [LIST] [*]Red-hot ProShares Bitcoin Strategy ETF (NYSEARCA:[URL='https://seekingalpha.com/symbol/BITO']BITO[/URL]) is garnering too much interest too quickly, as the ETF is reportedly on track to exceed the amount of futures contracts allowable to have by the Chicago Mercantile Exchange. [*][URL='https://www.bloomberg.com/news/articles/2021-10-21/bitcoin-etf-is-already-in-danger-of-breaching-a-limit-on-futures?srnd=etfs']Bloomberg[/URL] reported that after just two days of trading, BITO already owned about 1,900 contracts -- just under the 2,000 contracts that the CME says a single entity can hold. BITO also has accumulated 1,400 November contracts totaling 3,400 contracts. [*]At the rate of increase BITO is witnessing, it already has some $1.1B in assets under management and is approaching the 5,000 maximum total contracts that the CME allows. [*]According to [URL='https://www.cmegroup.com/education/bitcoin/cme-bitcoin-futures-frequently-asked-questions.html']the exchange's rules[/URL], spot-position limits "are set at 2,000 contracts. A position accountability level of 5,000 contracts will [also] be applied to positions in single months outside the spot month and in all months combined." [*]Bloomberg noted that one solution for ProShares is to have its holdings drag out to longer contract dates. However, the issue then is that the futures contracts could start to disjoint themselves from the actual price and performance of Bitcoin ([URL='https://seekingalpha.com/symbol/BTC-USD']BTC-USD[/URL]). [*]Nate Geraci, President of the ETF Store, told the news agency that "the end result is the ETF will start taking on potentially significant tracking error versus the spot price of Bitcoin." [*]Another solution could actually come from competitor Bitcoin-futures ETFs. As more and more such funds hit the market, BITO's competitors could soak up the heavy demand. [*]The Valkyrie Bitcoin Strategy ETF (NASDAQ:[URL='https://seekingalpha.com/symbol/BTF']BTF[/URL]) [URL='https://seekingalpha.com/news/3755603-vaneck-bitcoin-strategy-etf-to-challenge-proshares-bitcoin-strategy-etf']is set to come to market on Friday.[/URL] [*]Similarly, the rival VanEck Bitcoin Strategy ETF (BATS:[URL='https://seekingalpha.com/symbol/XBTF']XBTF[/URL]) [URL='https://seekingalpha.com/news/3755603-vaneck-bitcoin-strategy-etf-to-challenge-proshares-bitcoin-strategy-etf']appears likely to start trading on Monday.[/URL] [/LIST] [/QUOTE]
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