In a dynamic turn of events, institutional investment avenues have experienced a remarkable surge in activity, aligning with Bitcoin’s current valuation at $34,209. This surge coincides with a growing wave of anticipation regarding potential regulatory shifts in the United States. Citing credible sources like Bloomberg, it’s revealed that Bitcoin exchange-traded funds (ETFs) are on the brink of achieving unprecedented weekly capital inflows.
The speculation that the U.S. might soon greenlight a Bitcoin spot price-based ETF has not only influenced BTC’s price movement but has also had a positive ripple effect across the surrounding ecosystem. This surge in demand extends beyond exchanges and mining firms, reaching even the beleaguered institutional investment options.
According to Eric Balchunas, a senior ETF analyst at Bloomberg, at least two well-known entities experienced a significant trading volume during the week ending on Oct. 27. One of them was the ProShares Bitcoin Strategy ETF (BITO), which became the first futures-based ETF to receive approval in the U.S. in 2021.
In this recent update, Balchunas highlighted that $BITO saw a trading volume of $1.7 billion last week, its second-highest since its debut. He also noted that Grayscale Bitcoin Trust (GBTC) traded $800 million, reducing its discount to the Bitcoin spot price to a two-year low. Balchunas concluded that with $2.5 billion in less conventional exposure methods, there’s a discernible audience.
A Testament To Bitcoin ETF Momentum
This surge in ETF trading activity hasn’t gone unnoticed. William Clemente, the co-founder of crypto research firm Reflexivity, remarked that ETF trading is now “back in full steam.” Remarkably, GBTC has made a striking resurgence in recent months, even preceding the 15% gain in BTC/USD observed last week.
Recent legal victories on the arduous path toward converting GBTC into a spot ETF have provided the necessary impetus. Grayscale’s product now trades with an implied share price that is only 13.1% below the BTC spot price, according to data from monitoring resource CoinGlass. This is the narrowest discount observed since November 2021, a time when Bitcoin itself was at its all-time high.
Mister Crypto, a prominent figure in the Bitcoin and altcoin trading community, noted, “The GBTC discount keeps narrowing,” Interestingly, ARK Invest, an investment management firm, has chosen a different path, reducing its GBTC holdings alongside the rise in share price. Nevertheless, ARK is forging ahead with its plan to introduce a dedicated Bitcoin spot ETF. It’s worth noting that GBTC presently forms 10.24% of ARK’s Next Generation Internet ETF, a notable shift from the landscape in November 2022.