Institutional bitcoin (btc) investment vehicles are seeing a significant surge in volume as enthusiasm for potential regulatory changes in the United States takes hold.
Data from resources including Bloomberg showed that bitcoin exchange-traded funds (ETFs) and others were approaching record weekly inflows.
RECENTLY, GBTC trades $2.5 billion
Indications that the US could soon allow an ETF based on the bitcoin spot price have not only impacted btc price action – the surrounding ecosystem has benefited just as much.
In addition to stock markets and mining companies, distressed institutional investment options are also seeing a resurgence in demand.
As Bloomberg Senior ETF Analyst Eric Balchunas noted, at least two well-known names posted “notable” volume in the trading week through October 27.
Among them was the ProShares bitcoin Strategy ETF (BITO), the first futures-based ETF to get the green light in the US in 2021.
“$BITO traded $1.7 billion last week, the second biggest week since its wild WEEK ONE,” Balchunas wrote in part of a comment on X (formerly Twitter).
He noted that the stalwart Grayscale bitcoin Trust (GBTC) saw volume of $800 million, which helped narrow its discount to bitcoin‘s spot price to two-year lows.
“That’s $2.5 billion (top 1% among ETFs) in two less desirable (vs. spot) methods for exposure = while we think spot ETFs are unlikely to set records on DAY ONE, there is clearly an audience “, concluded publication X.
Remarkable: $LITTLE traded $1.7 billion last week, the second biggest week since its wild WEEK ONE. $GBTC earned 800 million dollars. That’s $2.5 billion (top 1% among ETFs) in two less desirable (vs. spot) methods of exposure = While we think spot ETFs are unlikely to set records on DAY ONE, there is clearly an audience. pic.twitter.com/6bFYtE0UoR
– Eric Balchunas (@EricBalchunas) October 28, 2023
Others also took notice of the data, such as William Clemente, co-founder of cryptocurrency research firm Reflexivity, describing ETF trading is “full steam ahead again.”
Legacy finance could “know something we don’t know yet”
As Cointelegraph reported, GBTC has seen a notable comeback in recent months, even before btc/USD gained 15% last week.
Related: US Court Issues Injunction for Grayscale Ruling, Paving Way for SEC to Review bitcoin Spot ETF
Legal victories in the long road to obtaining permission to convert GBTC to a spot ETF provided sparks, and Grayscale’s product now trades with an implied share price, which is just 13.1% below the spot price of btc.
By data According to tracking resource CoinGlass, this is the lowest since November 2021, when bitcoin itself was at all-time highs.
“GBTC discount continues to narrow,” meanwhile, popular bitcoin and altcoin trader Mister crypto answered.
“Maybe TradFi knows something we don’t know yet…”
Despite this, investment management firm ARK Invest has reduced its GBTC holdings in line with the stock price gains.
While ARK itself plans the launch of a bitcoin spot ETF, GBTC now represents 10.24% of its ARK Next Generation Internet ETF, its first change since November 2022.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.
