- Bitcoin (BTC) has risen to $34,350, attracting increased interest from institutional investment channels due to optimism about potential US regulatory changes.
- Bitcoin exchange-traded funds (ETFs) and trust funds are experiencing record weekly inflows, with BITO achieving $1.7 billion in trading volume in a single week.
- The resurgence in institutional investment comes as the US may allow a Bitcoin spot price-based ETF.
Bitcoin (BTC) has made a remarkable leap, touching $34,350, with institutional investment channels experiencing a significant surge in trading activity. This increased interest is being fueled by the growing optimism surrounding potential regulatory changes in the United States.
Various sources, including Bloomberg, have reported that Bitcoin exchange-traded funds (ETFs) and other institutional investment options are seeing record levels of weekly inflows. Notably, the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF to receive approval in the United States in 2021, witnessed impressive trading activity. The ETF market, now backed by substantial investments, is demonstrating its potential to become a significant player in the world of cryptocurrencies.
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Eric Balchunas, a senior ETF analyst at Bloomberg, noted that BITO achieved a staggering $1.7 billion in trading volume in a single week, marking its second-highest weekly volume since its launch. Additionally, the Grayscale Bitcoin Trust (GBTC) experienced $800 million in trading volume, reducing its discount to the Bitcoin spot price to a two-year low.
This resurgence in institutional investment comes in anticipation of the United States potentially allowing a Bitcoin spot price-based ETF. While the approval date for such an ETF remains uncertain, the growing interest in futures-based ETFs and trust funds underscores the increasing demand for cryptocurrency exposure among institutional investors.
William Clemente, co-founder of the crypto research firm Reflexivity, has stated that ETF trading is back in full swing, emphasizing the renewed interest and enthusiasm among investors.
GBTC, in particular, has made a remarkable comeback in recent months, even before Bitcoin’s 15% price surge last week. This resurgence can be attributed to legal victories that may pave the way for GBTC’s transformation into a spot ETF.
Currently, Grayscale’s product trades with an implied share price just 13.1% below the BTC spot price, indicating a significant reduction in the GBTC discount. Investment management firm ARK Invest has chosen to reduce its GBTC holdings in line with the share price gains.
Despite this reduction, ARK Invest is preparing for the launch of a Bitcoin spot ETF, while GBTC still holds a significant portion of its ARK Next Generation Internet ETF, marking a notable change since November 2022.
The latest developments in the institutional investment arena underscore the rapid evolution of the cryptocurrency market, offering more avenues for traditional investors to participate in the digital asset revolution. As the United States moves closer to potentially permitting a Bitcoin spot price-based ETF, enthusiasm and confidence in the future of cryptocurrencies are expected to continue growing.