Bitcoin ETF Sees $1.5B in Trades as GBTC ‘Discount’ Reflects $69K BTC Price

The institutional investment vehicles for Bitcoin (BTC) are experiencing a significant increase in volume as the anticipation of regulatory changes in the United States grows. Data from various sources, including Bloomberg, indicates that Bitcoin exchange-traded funds (ETFs) and other investment options are nearing record weekly inflows.

BITO and GBTC Trade $2.5 Billion

The possibility of the US allowing a Bitcoin spot price-based ETF has not only impacted the price action of BTC, but has also benefited the surrounding ecosystem. Apart from exchanges and mining firms, institutional investment options that have faced difficulties are also seeing a resurgence in demand.

A notable increase in volume was observed in at least two well-known investment vehicles during the trading week through October 27. One of them is the ProShares Bitcoin Strategy ETF (BITO), which became the first futures-based ETF to be approved in the US in 2021. Bloomberg senior ETF analyst Eric Balchunas noted that BITO traded $1.7 billion last week, the second-highest volume since its initial week.

Furthermore, the Grayscale Bitcoin Trust (GBTC) saw a trading volume of $800 million, leading to a reduction in its discount to the Bitcoin spot price to the lowest levels in two years. Balchunas highlighted that a total of $2.5 billion was invested into these two less desirable methods (compared to spot) for exposure, proving that there is clearly a demand for such investment options.

Other industry experts have also acknowledged the increase in ETF trading volume, with William Clemente, co-founder of crypto research firm Reflexivity, describing it as “back in full steam.”

Legacy Finance May Have Insider Knowledge

GBTC has experienced a remarkable comeback in recent months, even before BTC/USD rose by 15% last week. Legal victories in the long journey to converting GBTC into a spot ETF played a role in this recovery. Grayscale’s product now trades with an implied share price that is only 13.1% below the BTC spot price.

The discount on GBTC has been consistently narrowing, prompting some to speculate that traditional finance sector insiders may be privy to undisclosed information. However, investment management firm ARK Invest has reduced its GBTC holdings as the share price has increased. While ARK plans to launch a Bitcoin spot ETF, GBTC currently accounts for 10.24% of its ARK Next Generation Internet ETF.

This article does not provide investment advice or recommendations. All investment and trading decisions involve risk, and readers should conduct their own research.

Editor Notes

Bitcoin ETFs are gaining significant traction as institutional investors show interest in cryptocurrency. The recent surge in trading volumes for ETFs like BITO and GBTC signifies the growing confidence in Bitcoin among mainstream investors. As regulators in the United States consider approving a Bitcoin spot price-based ETF, the market is eagerly watching for further developments.

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