ProShares Says Bitcoin ETF Has Matched BTC Price Closely, 'Roll Cost' Concerns Are Unwarranted
Interest on the ETF's cash balances helps offset the cost of rolling from one set of futures to the next, ensuring a low performance discrepancy, the firm said.
ProShares, the issuer of the (ETF), said concerns that costs associated with trading of the derivatives would lead to tracking errors are unfounded and the product has closely mimicked bitcoin's spot-price performance since day one.
The ProShares Bitcoin Strategy Fund began trading under the ticker BITO on the New York Stock Exchange in October, 2021, allowing investors to gain exposure to bitcoin (BTC) without having to 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).
, 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. Usually, longer-dated futures contracts trade at a premium to those closer to expiry, a condition known as contango. The contango tends to steepen during bull runs, and the steeper the contango, the higher the costs, and the so-called contango bleed.
"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. "Since its inception (through 7/18), BITO has returned -54.5% compared to -51.5% for bitcoin. And over half of that modest difference is BITO's fee of 95bps per annum."
Bitcoin's recent rally and the resulting widening of contango at the end of June have and strengthened calls for spot-based ETFs, which invest directly in bitcoin and eliminate the need to roll over positions. Since June 15, a number of traditional finance giants like BlackRock, Invesco and others have (SEC) for spot-based bitcoin ETFs.
According to Hyman, BITO continues to closely track the spo t price as the fund's interest income from cash holdings compensates for the roll costs, which are closely tied to the level of interest rates in the U.S. economy.
"For a financial future with no storage costs, as is the case with the CME bitcoin futures, the futures contract premium should be in the ballpark of the term-equivalent interest rate. The Fed's raising of the benchmark interest rate by 500 basis points since March 2022 has been a key driver of those premiums, and consequently the roll costs of a bitcoin futures strategy," Hyman said.
"Here's the key piece of the puzzle. BITO earns interest on its cash balances which are driven by those same term-equivalent interest rates, which offset the roll costs. The result is close tracking to the price movements of spot bitcoin," Hyman added.
As Hyman says, one component of futures prices is interest rates, and the U.S. Federal Reserve has lifted its target range to 5%-5.25% to control inflation. Other variables include the price of the underlying asset, storage costs and convenience yield. The CME bitcoin futures are cash-settled, so there also no storage costs.
BITO earns interest from its cash holdings. The interest income is paid out in monthly dividends and covers the roll decay in the fund. BITO has paid dividends this year.
When asked if potential spot ETFs would drive investors away fro m futures-based products, Hyman said it's tough to speculate on products that don't exist.
"BITO’s track record of performance and flows are a testament to the effectiveness of a bitcoin futures strategy within an ETF and investor interest," Hyman noted.
As of July 18, the ProShares ETF had $1.1 billion in assets under management. It has seen year-to-date inflows of $336.2 million. Since its inception, the fund has amassed $2.2 billion in investor money.
The market expects a potential launch of spot-based ETFs to unlock floodgates for institutional money.
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.
You may also like
Bitcoin News Today: Bitcoin's Major Holders Selling Challenges ETF Support at $90k
- Bitcoin whale inflows hit 9,000 BTC on Nov 21, 2025, with 45% of deposits from large holders, signaling intensified selling pressure amid a seven-month price drop to $80,600. - Exchange inflows surged to $40B weekly, with Binance’s stablecoin reserves reaching $51B, reflecting capital shifts toward dollar-pegged assets amid market uncertainty. - ETF inflows (e.g., BlackRock’s IBIT) provided limited counterbalance, totaling $21M on Nov 27, contrasting with earlier $903M outflows and whale-driven altcoin d

Solana News Today: Crypto at a Turning Point—Speculation Mania or Institutional Domination?
- Arthur Hayes, ex-BitMEX CEO, boosted DeFi exposure with 2.01M ENA and 33K ETHFI tokens amid crypto volatility. - Solana (SOL) struggles to break $150, forming a bear flag pattern that could trigger a 30% drop to $99 if $140 support fails. - Nasdaq's IBIT options proposal and Grayscale's Zcash ETF filing signal growing institutional crypto adoption amid fragmented market dynamics. - Astra Bitcoin's hybrid model blends TradFi/DeFi assets to address volatility concerns, yet speculative momentum remains evid

Bitcoin Updates: With Retail Investors Declining, Large Holders and ETFs Influence Bitcoin's Direction
- Bitcoin's $91,000 rebound highlights institutional dominance over retail traders, driven by ETF inflows and whale accumulation. - Bhutan's $970,000 ETH staking and RGB20 protocol advancements signal institutional validation of Bitcoin's programmable finance potential. - Solana's $8.2M ETF outflow and $36M hack contrast Bitcoin's stability, as large holders buffer against volatility. - ETF-driven price dynamics and privacy-focused products like Zcash ETFs reflect shifting market structure toward instituti

Zcash Latest Updates: Zcash ETF Anticipation Faces Bearish Trends—Will This Privacy Coin Overcome the Downturn?
- Zcash (ZEC) nears critical $442.53 support as technical indicators signal bearish momentum with 12/12 "Strong Sell" signals. - Grayscale's proposed ZCSH ETF aims to institutionalize privacy-focused crypto access, holding 394,400 ZEC valued at $199M. - Market remains muted despite ETF filing, with ZEC down 1.4% amid regulatory uncertainty and broader crypto volatility. - ETF approval could boost ZEC liquidity like Bitcoin ETFs, but traders watch $442.53 support and SEC review outcomes.
