A significant increase in volume is being observed in bitcoin institutional investment vehicles as anticipation of potential regulatory changes in the United States grows.
Data from sources, such as Bloomberg, indicated that record weekly inflows were approaching for Bitcoin exchange-traded funds (ETFs) and other products.
Not only has the price action of Bitcoin been affected by hints that the U.S. might soon permit a Bitcoin spot price-based ETF, but the surrounding ecosystem has also benefited.
Demand for troubled institutional investment options is rising, in addition to exchanges and mining companies.
In the trading week ending on October 27, at least two well-known brands experienced “notable” volume, according to Eric Balchunas, senior ETF analyst at Bloomberg.
One of them was the ProShares Bitcoin Strategy ETF (BITO), which was approved as the first futures-based ETF in the United States in 2021.
$BITO traded $1.7 billion last week, marking the second-biggest week since its explosive WEEK ONE, Balchunas said in a Twitter commentary.
He pointed out that the stable Grayscale Bitcoin Trust (GBTC) brought in $800 million in volume, which contributed to bringing down its two-year low discount to the spot price of Bitcoin.
While we believe spot ETFs are unlikely to set records on Day One, there is obviously an audience, as evidenced by the $2.5 billion (top 1% among ETFs) invested in two less desirable methods (vs spot) for exposure, the twitter post concluded.
William Clemente, co-founder of the cryptocurrency research company Reflexivity, noted that ETF trading was “back in full steam” after seeing the data.
It has been reported that GBTC has made a spectacular recovery in recent months, even before the 15% increase in BTC/USD last week.
Grayscale’s product is currently trading with an implied share price that is just 13.1% below the spot price of Bitcoin thanks to legal victories that were obtained along the arduous journey of obtaining authorization to convert GBTC into a spot ETF.
This is the lowest since November 2021, when Bitcoin itself was at all-time highs, according to data from the monitoring resource CoinGlass.
Meanwhile, well-known Bitcoin and altcoin trader Mister Crypto retorted, saying, “The GBTC discount keeps narrowing.”
In spite of this, ARK Invest, an investment management company, has decreased its holdings in GBTC in proportion to the increases in share price.
ARK intends to launch a Bitcoin spot ETF, but for the first time since November 2022, GBTC now makes up 10.24% of its ARK Next Generation Internet ETF.