ProShares’ new exchange-traded fund built for the USD$300 billion stablecoin market opened with a surge of activity, driving speculation that a major token issuer could be involved.
Launched on Thursday, the ProShares GENIUS Money Market ETF (NYSEARCA: IQMM) recorded roughly USD$17 billion in trading volume on its first day. That figure stunned market watchers and immediately drew comparisons to past high-profile launches.
The fund holds short-term U.S. Treasuries and aims to comply with the GENIUS Act, a new federal law governing stablecoin reserves. It marks the first ETF structured specifically to align with those requirements. Additionally, the design gives crypto companies a regulated vehicle for parking reserve assets.
For context, BlackRock Inc. (NYSE: BLK)’s spot bitcoin ETF debuted with about USD$1 billion in first-day trading. However, IQMM’s volume far exceeded that figure. The gap fueled debate about whether a large stablecoin issuer had shifted assets into the fund.
Nate Geraci, president of The ETF Store, suggested on social media that the flows could point to a partnership. He indicated that Circle, the company behind the USD$74 billion USDC token, would be the most likely candidate based on asset size. Additionally, he implied that few other U.S.-based issuers could generate that scale of movement.
Circle’s main reserve fund has not shown dramatic changes. The company manages that pool with BlackRock. It held nearly USD$64 billion as of Friday, up from USD$59 billion at the end of January. Meanwhile, available data does not show a sudden USD$17 billion shift away from that vehicle.
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Demand from stablecoin issuers remains
Some analysts believe the explanation may be simpler. Ben Johnson, who leads client solutions for asset management research at Morningstar, pointed to internal fund movements. He noted that one ProShares leveraged ETF, QTTT, transferred about USD$6 billion into IQMM on launch day. Consequently, that internal allocation accounts for a large share of the headline number.
That type of move can inflate trading volume without bringing in new outside money. Additionally, fund families often rebalance or reposition assets when they introduce new products. As a result, day-one figures may not reflect fresh capital entering the stablecoin ecosystem.
Even so, demand from stablecoin issuers remains plausible. More than USD$300 billion worth of dollar-backed tokens circulate globally. Furthermore, regulators now require issuers to hold safe, liquid reserves, primarily in short-term government debt.
Markus Thielen, founder of 10x Research, described IQMM as the only product currently tailored to the GENIUS Act rules. He wrote that the ETF combines regulatory compliance with rapid liquidity. Additionally, he argued that this structure could appeal to issuers seeking efficient reserve management.
U.S.-based firms such as Circle Internet Group (NYSE: CRCL), Paxos and BitGo Holdings (NYSE: BTGO) could consider similar allocations. Meanwhile, banks exploring tokenized deposits under the new law may also look at these funds. Tether Holdings Ltd., which oversees the USD$184 billion USDT token, has launched a U.S. stablecoin with Anchorage Digital. Consequently, competition among issuers could increase demand for compliant reserve vehicles.
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