Investors love for Bitcoin ETFs strong despite cryptocurrency's slump

Bitcoin is on pace for its worst monthly performance since May, but exchange-traded fund investors are still ploughing money toward products that track the cryptocurrency’s futures. The ProShares Bitcoin Strategy ETF (ticker BITO) has taken in more than $40 million so far in December, its third straight monthly infusion, according to data compiled by Bloomberg. Similarly, investors have added $6.5 million to the Valkyrie Bitcoin Strategy ETF (BTF) since the end of November, also its third consecutive month of inflows.

That comes amid a crypto downturn that’s seen Bitcoin lose 17% during the last month of the year, putting it on pace for its worst performance since May when it shed 35%. Other cryptocurrencies have lost ground too as investors pull away from some of the riskiest corners of the market. 

Both BITO and BTF launched in October, the first two Bitcoin-futures funds to trade in the U.S. Both had banner starts, with ProShares’s product in particular seeing massive amounts of investor interest. Still, the recent inflows for both funds pale in comparison to what each saw upon their debuts. 

“There had been pent-up demand to gain exposure to the price of Bitcoin through ETFs before the products laufapplenched and many investors have a favorable long-term view of the cryptocurrency that is not broken by recent volatility,” Todd Rosenbluth, head of ETF and mutual fund research at CFRA, wrote in an email. “Investors have stayed loyal in the past month and likely will into 2022.”

Tech Weighs on Stocks While Treasuries Extend Drop: Markets Wrap

(Bloomberg) U.S. stocks fluctuated on Wednesday as investors assessed the economic implications of the omicron coronavirus outbreak. Treasury yields rose across the board.

Declines in big-tech shares, including Nvidia Corp. and Meta Platforms Inc., countered gains in materials and consumer stocks, leaving the S&P 500 little changed in thin trading. The Nasdaq 100 slid 0.2%, underperforming major benchmarks. Tesla Inc. fell after Chief Executive Elon Musk sold a further $1.02 billion of shares. The yield on 10-year Treasuries climbed to 1.55%, the highest since November, while the dollar dropped.

Omicron fears are easing on growing evidence that the fast-spreading strain leads to milder symptoms, even as worldwide Covid-19 cases rose above 1 million for a second straight day. Coronavirus developments along with Federal Reserve policy tightening and China’s outlook rank among the key risks for 2022.

“We just might get a relatively calm last week of the year after all,” Matt Maley, chief market strategist for Miller Tabak + Co. wrote. “That said, thin markets can change on a dime, so investors will want to stay nimble over the next three days.”

The 10-year Treasury yield rose as much as 7.4 basis points to 1.55%, testing the 50-day moving average that has contained it since Nov. 29. The dollar fell against all of its Group-of-10 peers except the yen. Bitcoin stayed below $48,000 after a tumble that hinted at diminished ardor for the most speculative assets.

“We’re sober about potential headwinds that still could be coming, even the rest of this year, but early in 2022 -- the Fed is going to be raising rates, that will change things for the markets,” Ann Miletti, head of active equity at Allspring Global Investments, said on Bloomberg Television. “We are also hopeful because as you look at a lot of the economic data, it remains strong.”