Bitcoin ETFs and Other Investment Options See Record Inflows
Institutional investment vehicles for Bitcoin (BTC) are witnessing a significant surge in volume, fueled by anticipation of potential regulatory changes in the United States. Data from sources such as Bloomberg indicates that Bitcoin exchange-traded funds (ETFs) and other investment options are nearing record weekly inflows.
Possible Bitcoin Spot Price-Based ETF Impacts Market
The possibility of the U.S. allowing a Bitcoin spot price-based ETF has not only affected BTC price action but has also had a positive impact on the overall cryptocurrency ecosystem. In addition to exchanges and mining firms, institutional investment options that have faced challenges in the past are experiencing renewed demand.
Notable Volume Increase for Bitcoin Strategy ETF and Grayscale Bitcoin Trust
According to Bloomberg senior ETF analyst Eric Balchunas, at least two well-known investment vehicles saw a significant increase in volume during the trading week through October 27. One of them was the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF to receive approval in the U.S. in 2021. Balchunas also highlighted that the Grayscale Bitcoin Trust (GBTC) observed a trading volume of $800 million, leading to a reduction in its discount to the Bitcoin spot price, reaching a two-year low.
ETF Trading Back in Full Swing
Industry experts have taken note of the recent data, with William Clemente, co-founder of crypto research firm Reflexivity, describing ETF trading as being "back in full steam." The resurgence in interest in Bitcoin ETFs can be attributed to legal victories and the potential for GBTC to be converted into a spot ETF, resulting in its trading price being just 13.1% below the BTC spot price. This discount is the lowest since November 2021 when Bitcoin reached its all-time high.
ARK Invest Reduces GBTC Holdings Amid Price Gains
However, investment management firm ARK Invest has reduced its GBTC holdings in line with the share price gains. Although ARK plans to launch a Bitcoin spot ETF, GBTC currently makes up 10.24% of its ARK Next Generation Internet ETF (ARKW), marking its first change in holdings since November 2022.
Please note that this article does not provide investment advice or recommendations. Readers are encouraged to conduct their own research before making any investment decisions.
