ProShares’ new ETF built for the fast-growing, $300 billion world of stablecoins had a massive launch, fueling speculation that a major stablecoin issuer may be involved.
The fund, called the ProShares GENIUS Money Market ETF (IQMM), is designed to hold short-term US government bonds and meet the reserve requirements of the GENIUS Act, a federal law that regulates stablecoin issuers in the United States. It is the first ETF structured specifically to fit these rules, and this positioning may have caught the attention of some of the biggest crypto players.
The ETF recorded a whopping $17 billion in trading volume on its first day, suggesting some big players allocated to the fund. For context, BlackRock’s spot bitcoin ETF — one of the most anticipated launches in years — saw $1 billion in first-day volume.
Circle move funds or internal shuffle?
The massive amount has left analysts speculating about the source of the influx.
Nate Geraci, president of The ETF Store, said in an X post that the heavy flows could signal a deal with a major US-based stablecoin issuer. “When you look at assets, think it would only leave Circle,” he said, referring to the company behind the $74 billion USDC token.
However, Circle’s primary reserve fund for USDC, managed by BlackRock, has not shown any major changes so far. It had nearly $64 billion in assets as of Friday, up from $59 billion at the end of January, data show.
What is more likely is that the initial volume came from ProShares’ own funds moving assets for cash management purposes.
Ben Johnson, head of asset management client solutions at Morningstar, noted that one of ProShares’ leveraged ETFs, QTTT, moved $6 billion into IQMM on launch day. That kind of internal allocation would explain much of the day-1 activity.
Playbook for stablecoin reserves
Still, demand from stablecoin issuers is a real possibility. With over $300 billion in US dollar stablecoins in circulation, a significant portion of these reserves may eventually be allocated to ETFs like IQMM.
Markus Thielen, founder of 10x Research, wrote in a Friday report that IQMM is “currently the only purpose-built tool” that meets GENIUS Act regulations while providing high-speed liquidity.
That could make it an option for US-based issuers like Circle, Paxos and BitGo – and even for banks looking to issue their own tokenized deposits under the new law. Tether, which operates the largest stablecoin in the world with $184 billion USDT token, has also rolled out a stablecoin with federal bank Anchorage Digital in the US market.
As stablecoins become more and more regulated with new tokens being launched, tens of billions in additional assets could eventually flow into funds like IQMM, Thielen said.
