Bitcoin (BTC) institutional investment vehicles are experiencing a surge in volume as excitement builds around potential regulatory changes in the United States. Data from sources like Bloomberg suggests that Bitcoin exchange-traded funds (ETFs) and other investment options are seeing close to record-breaking weekly inflows.
BITO and GBTC Trade $2.5 Billion
The anticipation of a Bitcoin spot price-based ETF being allowed in the U.S. has not only affected BTC price movement, but also had a positive impact on the broader ecosystem. Alongside exchanges and mining firms, institutional investment options that have faced challenges are also witnessing renewed demand.
Bloomberg senior ETF analyst Eric Balchunas pointed out that two well-known investment vehicles experienced significant volume during the trading week ending on October 27th. One of them was the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF to receive regulatory approval in the U.S. in 2021.
In a commentary on X (formerly Twitter), Balchunas stated, “$BITO traded $1.7 billion last week, the second-largest volume since its initial week of wild trading.” He also mentioned that the Grayscale Bitcoin Trust (GBTC) had a trading volume of $800 million, helping to narrow the discount between its share price and the Bitcoin spot price to a two-year low.
“That’s $2.5 billion, which puts them in the top 1% among ETFs, invested in two less desirable methods (compared to spot) for exposure. While we believe spot ETFs are unlikely to achieve record-breaking volumes on day one, it is evident that there is an audience,” concluded the X post.
Notable: $BITO traded $1.7 billion last week, the second-largest volume since its initial week of wild trading. $GBTC did $800 million. That’s $2.5 billion, which puts them in the top 1% among ETFs, invested in two less desirable methods (compared to spot) for exposure. While we believe spot ETFs are unlikely to achieve record-breaking volumes on day one, it is evident that there is an audience. pic.twitter.com/6bFYtE0UoR
— Eric Balchunas (@EricBalchunas) October 28, 2023
Others have also taken note of this data. William Clemente, co-founder of crypto research firm Reflexivity, described ETF trading as “back in full steam.”
Legacy Finance May Have Insider Information
As previously reported by Cointelegraph, GBTC has experienced a remarkable resurgence in recent months, even before BTC/USD saw a 15% increase last week.
Related: US court issues mandate for Grayscale ruling, paving way for SEC to review spot Bitcoin ETF
Legal victories in the journey to convert GBTC into a spot ETF have fueled this recovery, and Grayscale’s product now trades at an implied share price that is just 13.1% below the BTC spot price.
According to data from CoinGlass, this is the smallest discount since November 2021, when Bitcoin reached its all-time high.
“The GBTC discount keeps narrowing,” replied popular Bitcoin and altcoin trader Mister Crypto.
“Perhaps traditional finance knows something that we don’t know yet…”
Despite this, investment management firm ARK Invest has reduced its GBTC holdings in line with the share price gains. While ARK plans to launch a Bitcoin spot ETF, GBTC currently represents 10.24% of its ARK Next Generation Internet ETF, marking its first adjustment since November 2022.
This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before making a choice.
