Bitcoin Institutional Investment Tools Soar Amid Anticipation of US Regulatory Changes
Summary:
Amid anticipations of regulatory changes in the US, Bitcoin institutional investment tools, including ETFs, are witnessing a significant boost in volume, with ProShares Bitcoin Strategy ETF (BITO) trading $1.7 billion, and Grayscale Bitcoin Trust (GBTC) generating $800 million in volume, totalling a top 1% performance among ETFs. Meanwhile, ARK Invest is lessening its GBTC holdings despite Bitcoin's impressive performance, preparing for its Bitcoin spot ETF launch.
Amid resurging anticipation for possible alterations in American cryptocurrency regulations, institutional investment vehicles for Bitcoin, including Bitcoin exchange-traded funds (ETFs), are garnering heightened weekly inflow almost to the point of breaking previous records. With suggestions that the US may initiate a Bitcoin spot price-based ETF, not only is Bitcoin's price performance being affected, but auxiliary establishments are also extracting benefits.
Among those experiencing increased demand are institutional investment options, which have previously faced difficulties. During the week leading up to October 27, familiar players observed a noteworthy rise in their trading volumes. The ProShares Bitcoin Strategy ETF (BITO)— the inaugural futures-oriented ETF in America to get approval in 2021, cleared a $1.7 billion trade last week. Bloomberg's senior ETF analyst Eric Balchunas announced that as the other significant player, the Grayscale Bitcoin Trust (GBTC), picked up $800 million in volume, their discount to Bitcoin's spot price dwindled to a two-year minimum.
Together, both enterprises pulled in $2.5 billion, rendering them within the top 1% of ETFs. As opined in an X post, this suggests an increasing demand for Bitcoin exposure through these alternatives, despite them being comparatively less preferred than a Bitcoin spot.
Commenting on these findings, William Clemente of the crypto research firm Reflexivity called ETF trading's resurgence a return to "full steam." Meanwhile, GBTC is experiencing a strong return to form, despite the recent 15% gain in BTC to USD conversions. A mixed cocktail of victories in court battles for converting GBTC into a spot ETF, accompanied by a Grayscale product now listed with an implied share price only 13.1% below the BTC spot price, has highly contributed to this impressive performance. However, amidst all this, the investment management company, ARK Invest, is trimming down its GBTC stakes in line with the share price escalation.
As ARK gears up for its Bitcoin spot ETF launch, GBTC holds a current stake of 10.24% in its ARK Next Generation Internet ETF (ARKW), marking its first shift since November 2022. It's crucial to keep in mind, however, that all trading moves entail risks, and people should thoroughly research before making any investment decisions.
Published At
10/29/2023 8:13:10 AM
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