In this ETF, institutions are trading on Bitcoin.

Although open-ended Bitcoin (BTC) space ETFs by BlackRock and others are all the rage in crypto, there's a little older Bitcoin fund that's seen big gains over the past few months.

The 2X Bitcoin Strategy ETF (BITX) has quadrupled its Bitcoin exposure since January, now ruling as one of the largest Bitcoin futures ETFs in the United States.

Institutions are increasing the use of Bitcoin

According to the Volatility Shares website, BITX had net assets worth $1.58 billion as of Tuesday. By comparison, the ProShares Bitcoin Strategy ETF (BITO) — the first Bitcoin futures ETF to debut in the U.S. — had $2.82 billion in assets on Tuesday, making BITX one of the only competitors in the futures ETF market.

“BITX is bigger than most of us think,” Bloomberg ETF analyst Eric Balchunas said in a post on Wednesday for X.

“Institutions are increasing their leveraged Bitcoin exposure,” added Nick Puckrin, CEO and co-founder of CoinBureau. “Just goes to show, institutions are just as rotten as the rest of us.”

Traditional Bitcoin Futures ETFs – such as BITO – seek to provide investors with returns that closely track Bitcoin by investing in Bitcoin futures contracts.

But BITX is used: CME Bitcoin futures that aim to produce daily returns that match 2X. That makes it a more risky and volatile crypto investment option for people to buy in their brokerage accounts — but an extra juicy pick for Bitcoin bulls.

Since its debut in June 2023, BITX has performed as expected: first-day buyers have increased their investment by 235%, compared to 117% if they had bought Bitcoin itself. Within certain timeframes, BITX has more than doubled Bitcoin's performance.

ETF risks used

According to K33 Research, inflows into the fund since March have outpaced most new Bitcoin spot ETFs, including the ARK 21Shares Bitcoin ETF (ARKB) and the Bitwise Bitcoin ETF (BITB).

“The flows are still much lower than the inflows into spot products, but the growth rate is high,” Pukrin explained.

While the returns look promising, BITX notes in its prospectus that returns can fluctuate over the long term and will not match Bitcoin 2X.

“For periods longer than one day, the fund will lose money if the index's performance is flat, and the fund may lose money even if the index's level rises,” he says.