Bitcoin institutional investment vehicles are experiencing a surge in volume as anticipation grows around potential regulatory changes in the United States. According to data from Bloomberg and other sources, Bitcoin exchange-traded funds (ETFs) and other investment options are seeing record weekly inflows.
The possibility of a Bitcoin spot price-based ETF being allowed in the US has not only impacted the price of BTC, but it has also benefited the overall ecosystem. In addition to exchanges and mining firms, institutional investment options are also witnessing a resurgence in demand.
Bloomberg senior ETF analyst Eric Balchunas highlighted that two well-known investment options had notable trading volume in the week leading up to October 27. One of them is the ProShares Bitcoin Strategy ETF (BITO), which became the first futures-based ETF to receive approval in the US this year. BITO traded $1.7 billion last week, marking the second-largest trading week since its initial launch.
Another investment vehicle, the Grayscale Bitcoin Trust (GBTC), also saw significant trading volume, amounting to $800 million. This boost in volume helped reduce its discount to the Bitcoin spot price to its lowest level in two years.
The data caught the attention of industry experts, with William Clemente, co-founder of crypto research firm Reflexivity, noting that ETF trading is back in full steam.
GBTC has experienced a remarkable comeback in recent months, even prior to Bitcoin’s 15% price increase last week. Legal victories along the journey to convert GBTC into a spot ETF have played a significant role in its resurgence. Grayscale’s product now trades with an implied share price just 13.1% below the BTC spot price, the lowest level since November 2021 when Bitcoin reached its all-time high.
Despite GBTC’s narrowing discount, investment management firm ARK Invest has reduced its GBTC holdings in line with the share price gains. However, ARK Invest itself plans to launch a Bitcoin spot ETF, and GBTC still accounts for 10.24% of its ARK Next Generation Internet ETF (ARKW). This marks the first change in GBTC’s allocation since November 2022.
The increasing interest in Bitcoin institutional investment options reflects the growing optimism surrounding potential regulatory changes in the US. While it remains uncertain whether spot ETFs will set records on the first day of their launch, there’s clearly a thriving audience eager to gain exposure to cryptocurrencies through various investment vehicles.
It’s important to note that this article does not provide investment advice or recommendations. Investors should conduct their own research and analysis before making any investment decisions.
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