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

CointimeCointime2023/11/02 16:33
By:Cointime

Bitcoin  institutional investment vehicles are seeing a major volume boost as excitement over possible United States regulatory changes takes hold.

Data from resources, including Bloomberg, showed Bitcoin exchange-traded funds (ETFs) and others nearing record weekly inflows.

BITO, GBTC trade $2.5 billion 

Hints that the U.S. might soon allow a Bitcoin spot price-based ETF have not only  impacted BTC price action  — the surrounding ecosystem has benefitted in kind.

In addition to exchanges and mining firms, embattled institutional investment options are also seeing a resurgence in demand.

As noted by Bloomberg senior ETF analyst Eric Balchunas, at least two household names saw “notable” volume in the trading week through Oct. 27.

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

“$BITO traded $1.7b last week, 2nd biggest week since its wild WEEK ONE,” Balchunas wrote in part of commentary on X (formerly Twitter).

He noted that the stalwart Grayscale Bitcoin Trust (GBTC) fetched $800 million in volume, helping reduce 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,” the X post concluded.

Others also picked up on the data, with William Clemente, co-founder of crypto research firm Reflexivity,  describing  ETF trading as “back in full steam.“

Legacy finance could “know something we don’t yet”

As Cointelegraph reported, GBTC has  seen a remarkable comeback  in recent months, even prior to BTC/USD gaining 15% last week.

Legal victories on the long road to gaining permission to convert GBTC into a spot ETF provided kindling, and Grayscale’s product now trades with an implied share price, which is just 13.1% below the BTC spot price.

Per  data  from monitoring resource CoinGlass, this is the lowest since November 2021, when Bitcoin itself was at all-time highs.

“The GBTC discount keeps narrowing,” popular Bitcoin and altcoin trader Mister Crypto meanwhile  responded .

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

GBTC premium vs. asset holdings vs. BTC/USD chart (screenshot). Source: CoinGlass

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

While ARK itself  plans a Bitcoin spot ETF launch , GBTC now accounts for 10.24% of its ARK Next Generation Internet ETF — its first change since November 2022.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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