$1.5B First Bitcoin ETF trades as GBTC ‘discount’ mirrors BTC price of $69K

Institutional investment vehicles in Bitcoin (BTC) are seeing a surge in volume as excitement grows over potential regulatory changes in the US.

Data from resources including Bloomberg showed that exchange-traded funds (ETFs) and others are approaching record weekly inflows.

BITO and GBTC trade is worth $2.5 billion

Hints that the US may soon allow an ETF based on the spot price of Bitcoin have not only affected Bitcoin’s price action – the surrounding ecosystem has benefited in kind.

In addition to stock exchanges and mining companies, beleaguered institutional investment options are also seeing a rebound in demand.

As Eric Balchunas, senior ETF analyst at Bloomberg, noted, at least two household names saw “significant” volume in the trading week ending October 27.

Among them was the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF to get the green light in the US in 2021.

“$BITO traded $1.7 billion last week, the second-largest week since a wild first week,” Balchunas wrote in part of a comment on X (formerly Twitter).

He noted that the powerful Grayscale Bitcoin Trust (GBTC) generated $800 million in volume, which helped reduce its discount on Bitcoin’s spot price to its lowest levels in two years.

“This means $2.5 billion (top 1% among ETFs) in two less favorable (versus spot) exposures = While we believe spot ETFs are unlikely to set records on day one, there is clearly audience,” X’s post concluded.

Others also picked up the data, with William Clementi, co-founder of cryptocurrency research firm Reflexivity, a description ETF trading is ‘back in full force’.

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Legacy finance can ‘know something we don’t know yet’

As Cointelegraph reported, GBTC has seen a notable comeback in recent months, even before BTC/USD rose 15% last week.

Related: US court upholds Grayscale ruling, clearing the way for SEC to review Bitcoin exchange-traded fund

Legal victories on the long road to permission to convert GBTC into an exchange-traded fund (ETF) provide induction, and Grayscale’s product now trades at an implied share price, which is just 13.1% below BTC’s spot price.

for every Data From monitoring resource CoinGlass, this is the lowest level since November 2021, when Bitcoin itself was at all-time highs.

“GBTC discount continues to tighten,” popular Bitcoin and altcoin trader Mister Crypto said in the meantime. He responded.

“Maybe TradFi knows something we don’t know yet…”

GBTC premium versus asset holdings versus BTC/USD chart (screenshot). Source: Coinglass

Despite this, investment management firm ARK Invest has reduced its GBTC holdings in line with share price gains.

While ARK itself plans to launch a Bitcoin ETF, GBTC now represents 10.24% of the ARK Next Generation Internet ETF – its first change since November 2022.

This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.