First Bitcoin ETF Trades $1.5B as GBTC ‘Discount’ Echoes $69K BTC Price
Bitcoin (BTC) institutional investment vehicles are seeing a significant increase in volume due to excitement over regulatory changes in the United States.
Data from resources including Bloomberg showed that Bitcoin exchange-traded funds (ETFs) and others are approaching record weekly inflows.
Recently, GBTC traded $2.5 billion.
Suggestions that the US may soon allow an ETF based on the spot price of Bitcoin didn't just affect BTC's price action – the surrounding ecosystem benefited in kind.
In addition to mining exchanges and mining companies, leveraged institutional investment options are also seeing a revival in interest.
According to Eric Balchunas, senior ETF analyst at Bloomberg, at least two household names saw “notable” volume in the trading week through Oct. 27.
Among them is the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF to get the green light in the US in 2021.
“$BITO traded $1.7b last week, the 2nd biggest week since a wild week,” Balchunas said in a comment from X (formerly Twitter).
Stewart Grayscale Bitcoin Trust (GBTC) has reported $800 million in volume, helping push the decline to a two-year low in Bitcoin's spot price.
“When we consider that $2.5b (top 1% among EFAs) going into two undesirable methods (compared to spot) = unlikely to set a record on DAY ONE, there is clearly an audience.
Notable: $BITO traded $1.7b last week, the 2nd biggest week since a wild week. $GBTC made $800 million. That's $2.5b (top 1% among ETFs) with two less desirable methods (spot) = unlikely to set records on DAY ONE, clearly there's an audience pic.twitter.com/6bFYtE0UoR
— Eric Balchunas (@EricBalchunas) October 28, 2023
Others picked up on the data, with William Clemente, founder of crypto research firm Reflexivity, describing ETF trading as “full steam ahead.”
Legacy Finance “Can Know Things We Don't Know Yet”
According to Cointelegraph, even before GBTC gained 15% last week, GBTC has seen an impressive comeback in recent months.
RELATED: US Court Orders Grayscale Ruling, Clears Way for SEC to Review Bitcoin ETFs
Legal wins over Kidling and Greyscale's bid for permission to convert GBTC to spot ETFs now trade at an implied share price, which is 13.1% below BTC's spot price.
According to data from tracking resource CoinGlass, this is the lowest since November 2021, when bitcoin itself hit an all-time high.
“The GBTC offer is narrowing,” responded Mr. Crypto, a prominent Bitcoin and altcoin trader.
“Maybe TradFi knows something we don't yet…”
Despite this, investment management firm ARK Invest has reduced its GBTC holdings in step with share price gains.
While ARK itself plans to launch a Bitcoin Spot ETF, GBTC now accounts for 10.24% of the ARK Next Generation Internet ETF – the first change since November 2022.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
