ProShares IQMM’s $17B Debut and the Rise of Tokenized Funds
ProShares’ Genius Money Market ETF (IQMM) recorded approximately $17 billion in first-day trading volume on Thursday of last week, marking a record-setting launch and signaling strong demand for cash-management products as the asset class sees increased tokenization amid rising U.S. stablecoin use.
Money market funds allocate to short-term, high-quality debt instruments, including U.S. Treasury bills, repurchase agreements, and commercial paper. They are intended to preserve principal while delivering modest yields and daily liquidity, making them a widely used vehicle for managing cash.
The actively managed IQMM fund primarily invests in short-duration government securities. Its debut volume of $17 billion is unprecedented for a newly listed ETF.
According to Bloomberg ETF analyst Eric Balchunas, IQMM’s opening-day turnover eclipsed other notable launches. BlackRock’s iShares Bitcoin Trust (IBIT) saw roughly $1 billion in first-day trading, while a BlackRock ESG-focused ETF seeded by pension investors registered about $2 billion. Source: Eric Balchunas
Subsequent reporting indicated a substantial portion of IQMM’s activity was driven by internal allocations, with ProShares reallocating cash from existing funds into IQMM for treasury operations. Even so, the launch underscores the scale and strategic role of money market funds. The flows, whether fully organic or not, highlight their continued importance in portfolio construction.
Wall Street’s response to stablecoins?
The surge in interest coincides with growing adoption of tokenized money market funds on blockchain networks, where they are increasingly positioned as yield-bearing alternatives to traditional stablecoins.
As dollar-pegged stablecoins expand in payments and decentralized finance, tokenized money market funds are being promoted as compliant, interest-generating complements within the same ecosystem. The ProShares fund’s “GENIUS” branding reflects its structure under the GENIUS Act, legislation passed last year establishing a federal framework for payment stablecoins. The law sets standards for reserves, transparency, and supervision, reinforcing the role of high-quality liquid assets in backing digital dollars.
Market strategists have described tokenized money market funds as a competitive response from traditional finance. In July, JPMorgan strategist Theresa Ho told Bloomberg that tokenized money market funds could serve as an institutional alternative to stablecoins, particularly in collateral markets, noting that money market shares can be posted as collateral without forgoing interest—citing the Goldman Sachs–BNY Mellon tokenized money market fund initiative.
The Bank for International Settlements highlighted the asset class in a November bulletin, characterizing tokenized money market funds as a “fast-growing collateral and savings instrument.”
The growth of tokenized money market funds. Source: Bank for International Settlements
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
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