ProShares’ new ETF built for the fast-growing, $300 billion world of stablecoins had a massive launch, fueling speculation that one major stablecoin issuer may be involved.

The fund, called the ProShares GENIUS Money Market ETF (IQMM), is designed to hold short-term U.S. Treasuries and meet the reserve requirements laid out in the GENIUS Act, a federal law regulating stablecoin issuers in the U.S. It’s the first ETF structured specifically to fit those rules, and that positioning may have caught the attention of some of the largest players in crypto.

The ETF logged a whopping $17 billion in trading volume on its first day, suggesting that some large players were allocating to the fund. For context, BlackRock’s spot bitcoin ETF — one of the most anticipated launches in many years— saw $1 billion in first-day volume.

Circle moving funds or internal shuffle?

The massive volume has left analysts speculating about the source of the inflows.

Nate Geraci, president of The ETF Store, said in an X post that the heavy flows might signal a deal with a major U.S.-based stablecoin issuer. "Looking at assets, believe that would only leave Circle," he said, referring to the company behind the $74 billion USDC token.

However, Circle’s main reserve fund for USDC, managed by BlackRock, hasn’t shown any major changes so far. It held nearly $64 billion in assets as of Friday, up from $59 billion at the end of January, data shows.

What's more likely is that the initial volume came from ProShares’ own funds moving assets for cash management purposes.

Ben Johnson, head of client solutions for asset management 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 a large portion of the day-one activity.

Playbook for stablecoin reserves

Still, demand from stablecoin issuers is a real possibility. With over $300 billion in U.S. dollar stablecoins in circulation, a significant portion of those reserves could 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 the GENIUS Act rules while providing high-speed liquidity.

That could make it a go-to choice for U.S.-based issuers like Circle, Paxos and BitGo — and even for banks looking to issue their own tokenized deposits under the new law. Tether, which runs the largest stablecoin in the world with the $184 billion USDT token, has also rolled out a stablecoin with federal bank Anchorage Digital in the U.S. market.

As stablecoins become increasingly regulated with new tokens launching, tens of billions in additional assets could eventually flow into funds like IQMM, Thielen said.