ProShares and Grayscale are at the forefront of a surge in Bitcoin investment products, with significant volume and renewed demand for institutional options.
Bitcoin’s institutional investment landscape is experiencing a notable uptick in volume, driven by anticipation of potential regulatory changes in the United States.
Data from various sources, including Bloomberg, indicates that Bitcoin exchange-traded funds (ETFs) and similar products are approaching record weekly inflows.
The speculation that the U.S. might soon approve a Bitcoin spot price-based ETF is not only influencing BTC price dynamics but is also benefiting the broader ecosystem.
Beyond exchanges and mining firms, institutional investment vehicles, including popular names, are witnessing a resurgence in demand.
According to Eric Balchunas, a senior ETF analyst at Bloomberg, at least two well-known options saw “notable” volume in the trading week through Oct. 27.
One of them is the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF approved in the U.S. in 2021.
“$BITO traded $1.7b last week, 2nd biggest week since its wild WEEK ONE,” Balchunas commented on X (formerly Twitter).
He highlighted that the Grayscale Bitcoin Trust (GBTC) recorded $800 million in volume, contributing to reducing its discount to the Bitcoin spot price to two-year lows.
“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,” concluded the X post.
GBTC has experienced a remarkable comeback in recent months, even preceding BTC/USD’s 15% gain last week.
Legal victories in the ongoing quest for approval to convert GBTC into a spot ETF have fueled this resurgence. Grayscale’s product now trades with an implied share price just 13.1% below the BTC spot price, marking the lowest since November 2021.
“The GBTC discount keeps narrowing,” observed popular Bitcoin and altcoin trader Mister Crypto.
“Maybe TradFi knows something we don’t know yet…”
However, investment management firm ARK Invest has reduced its GBTC holdings despite the share price gains. While ARK plans to launch a Bitcoin spot ETF, GBTC now constitutes 10.24% of its ARK Next Generation Internet ETF, marking its first change since November 2022.