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ProShares Bitcoin Strategy ETF and Potential Problems

The first U.S. Bitcoin-linked exchange-traded fund (ETF) is on course to reach a limit on the number of futures contracts it’s allowed after quickly becoming a little too popular. After several days of trading, the ProShares Bitcoin Strategy ETF reached 1,900 contracts sold for October. But there is a 2,000 front-month limit imposed by the Chicago Mercantile Exchange.

Presently, there are 1,400 contracts for November and there is an overall maximum limit of 5,000 open contracts. One option to solve this problem is to offer longer contracts, but that would carry the danger of too much distancing from BTC prices.

Nate Geraci also made a comment regarding the situation. Geraci is the president of the advisory firm the ETF Store. He mentioned that the fund could start to diverge from market prices. According to Geraci, the ETF is forced to obtain Bitcoin price exposure at higher and higher prices as it goes further out on the futures curve.

ProShares Bitcoin Strategy ETF and main findings

The launch of competing products may decrease the demand for the ProShares fund. The Valkyrie Bitcoin Strategy ETF will commence trading on Friday. Another competitor, the VanEck ETF is expected to commence trading on Monday.

The ProShares Bitcoin Strategy ETF is the first fund in history to reach $1 billion in assets under management in just two days. It started trading this week. The highly anticipated launch of the Bitcoin-linked ETF in the U.S. resulted in a number of milestone achievements.

The ProShares fund easily surpassed the previous record-holder, a gold-based fund with the ticker GLD. It took three days for GLD to reach the billion-dollar mark in 2004.

This fund also broke the record for the highest-ever first day of organic volume, which hit $1 billion on Tuesday when it launched.

Walmart and cryptocurrencies

Another crypto-related news also came from the U.S. Walmart in cooperation with Coinstar and Coinme installed 200 Bitcoin ATMs in its stores across the country. The pilot project only includes 200 kiosks, but the retail giant plans to install thousands of Bitcoin ATMs.

As of October 2021, there are more than 25,000 Bitcoin ATMs at grocery stores and service locations in the U.S. People can use ATMs by inserting a banknote and receiving a paper voucher with a redemption code. To redeem the code, they have to set up a Coinme account and complete a background check.

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