ProShares and Grayscale are at the forefront of a surge in Bitcoin investment products, and experts are optimistic that this indicates strong interest in a physically-backed Bitcoin ETF.
The price of Bitcoin, with the ticker symbol BTC, has dipped to $34,182. However, institutional investment products are experiencing a significant increase in trading volume. This surge in interest is attributed to growing excitement about potential regulatory changes in the United States.
Data from sources like Bloomberg indicates that Bitcoin exchange-traded funds (ETFs) and similar investment products are receiving near-record levels of weekly investments.
BITO and GBTC Trade $2.5 Billion
The possibility of the U.S. approving a Bitcoin ETF tied to the actual Bitcoin spot price has had a positive impact not only on BTC’s price but also on various related entities.
Apart from cryptocurrency exchanges and mining companies, institutional investment options that were previously facing challenges are now experiencing a resurgence in demand.
Bloomberg’s senior ETF analyst, Eric Balchunas, pointed out that at least two well-known investment products witnessed “significant” trading activity during the week ending on October 27.
One of these was the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF approved in the U.S. in 2021. Balchunas highlighted that BITO had traded $1.7 billion, marking the second-highest weekly volume since its initial week of launch.
Another notable performer was the Grayscale Bitcoin Trust (GBTC), which saw $800 million in trading volume, leading to a reduction in its discount compared to the Bitcoin spot price, reaching its lowest levels in two years.
In summary, these entities saw a combined trading volume of $2.5 billion, indicating a robust interest in alternative methods for Bitcoin exposure, despite the expectation that Bitcoin spot ETFs might not immediately set records. The data suggests a strong appetite for such investment options.
Notable: $BITO traded $1.7b last week, 2nd biggest week since its wild WEEK ONE. $GBTC did $800m. That's $2.5b (top 1% among ETFs) into two less desirable methods (vs spot) for exposure = while we think spot ETFs unlikely to set records on DAY ONE, clearly there's an audience pic.twitter.com/6bFYtE0UoR
— Eric Balchunas (@EricBalchunas) October 28, 2023
This resurgence in ETF trading activity has also been recognized by William Clemente, co-founder of the crypto research firm Reflexivity, who noted that ETF trading is once again in high demand.
Traditional Finance May Have Insider Insights
Grayscale’s legal wins to turn GBTC into a spot ETF helped narrow its discount to just 13.1% below the actual Bitcoin price. This is the smallest gap since November 2021, when Bitcoin reached its highest value ever. Popular crypto trader Mister Crypto also noted that the GBTC discount keeps getting smaller.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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