Bitcoin (BTC) institutional investment vehicles are seeing a sharp increase in volume as excitement grows over possible regulatory changes in the US.
Data from sources including Bloomberg showed that Bitcoin exchange-traded funds (ETFs) and others are nearing record weekly inflows.
BITO and GBTC trade at $2.5 billion
Evidence that the US may soon approve a Bitcoin spot price-based ETF has not only impacted BTC price performance – the surrounding ecosystem has also benefited.
In addition to stock exchanges and mining companies, competitive institutional investment opportunities are also seeing a resurgence in demand.
As Bloomberg’s senior ETF analyst Eric Balchunas noted, at least two household names saw “remarkable” volume in the trading week ending Oct. 27.
Among them was the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF to receive the green light in the US in 2021.
“$BITO traded $1.7 billion last week, the second-biggest week since its wild first week,” Balchunas wrote in a comment on X (formerly Twitter).
He noted that the trusty Grayscale Bitcoin Trust (GBTC) achieved $800 million in volume, helping to reduce its discount to the spot Bitcoin price to its lowest level in two years.
“That’s $2.5 billion (top 1% of ETFs) in two less desirable methods (compared to spot ETFs) of exposure. While we don’t think spot ETFs will set records on day one, there is clearly an audience,” the X post concluded.
Remarkable: $BITO traded $1.7 billion last week, its second-biggest week since its wild first WEEK. $GBTC made $800 million. That’s $2.5 billion (top 1% of ETFs) in two less desirable methods (compared to spot ETFs) of exposure. While we don’t think spot ETFs will set records on day one, there is clearly an audience pic.twitter.com/6bFYtE0UoR
— Eric Balchunas (@EricBalchunas) October 28, 2023
Others have also seized on the data, including William Clemente, co-founder of crypto research firm Reflexivity, descriptive ETF trading said to be “back in full swing”.
Legacy Finance could “know something we don’t know yet”
As Cointelegraph reported, GBTC has staged a remarkable comeback in recent months, even before BTC/USD gained 15% last week.
Related: US court grants mandate for Grayscale ruling, paving way for SEC to review spot Bitcoin ETFs
Legal victories on the long road to allowing GBTC to be converted into a spot ETF provided fuel, and Grayscale’s product now trades at an implied share price just 13.1% below the BTC spot price.
According to data from monitoring resource CoinGlass, this is the lowest level since November 2021, when Bitcoin itself hit an all-time high.
“The GBTC discount is getting smaller and smaller,” says popular Bitcoin and altcoin trader Mister Crypto replied.
“Maybe TradFi knows something we don’t know yet…”
GBTC premium vs asset holdings vs BTC/USD chart (screenshot). Source: CoinGlass
Nevertheless, investment management company ARK Invest has reduced its GBTC holdings in line with the price gains.
While ARK itself plans to launch a Bitcoin spot ETF, GBTC now makes up 10.24% of its ARK Next Generation Internet ETF – the first change since November 2022.
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their own research when making their decision.