First Bitcoin ETF trades $1.5B as GBTC ‘discount’ echoes $69K BTC price
ProShares and Grayscale are at the forefront of increased activity in Bitcoin investment products, leading the way in this space. Analysts are increasingly confident in the implied demand for a spot Bitcoin exchange-traded fund (ETF). Investment products related to Bitcoin have been gaining popularity and attention in the financial markets. ProShares and Grayscale, among other firms, are actively involved in offering Bitcoin-related investment products, such as Bitcoin exchange-traded funds (ETFs) and trusts. ProShares and Grayscale's involvement and success in this sector highlight the growing interest from investors in gaining exposure to Bitcoin through traditional financial products. Bitcoin ETFs, in particular, have generated considerable interest as they allow investors to trade Bitcoin in a more familiar and regulated format, similar to traditional stocks or securities. The increased activity and success in Bitcoin investment products suggest that there is a strong demand for a spot Bitcoin ETF, which would provide investors with a way to gain exposure to the price movements of Bitcoin without directly owning the cryptocurrency. A spot Bitcoin ETF would track the actual price of Bitcoin and make it more accessible to a broader range of investors, potentially further boosting the popularity of Bitcoin as an investment asset.
David Becker 
Bitcoin (BTC) is currently trading at $34,655, and there has been a surge in activity within institutional investment vehicles. This surge is fueled by excitement over possible regulatory changes in the United States. Data from various sources, including Bloomberg, indicates that Bitcoin exchange-traded funds (ETFs) and similar products are experiencing near-record weekly inflows.
Notably, there are hints that the U.S. may soon allow a Bitcoin spot price-based ETF, which has not only influenced Bitcoin's price but also benefited the broader crypto ecosystem. Beyond cryptocurrency exchanges and mining companies, institutional investment options have seen a resurgence in demand.
Two significant investment products have seen "notable" trading volume in the week through October 27. The first is the ProShares Bitcoin Strategy ETF (BITO), which is the first futures-based ETF to receive regulatory approval in the U.S. in 2021. It traded $1.7 billion in the past week, marking one of its most active weeks since its launch.
The Grayscale Bitcoin Trust (GBTC), a well-known cryptocurrency investment vehicle, also had significant trading volume, with $800 million in transactions. This increased activity has helped reduce the discount between GBTC's share price and the Bitcoin spot price to its lowest levels in two years.
This renewed interest in Bitcoin investment products suggests growing demand for a Bitcoin spot ETF, which would offer investors exposure to Bitcoin's price without direct ownership of the cryptocurrency. Despite the likelihood that spot ETFs may not set immediate records upon their launch, there is clearly an audience eager for such investment options.
Some observers have noted that this renewed interest in Bitcoin investment products, including GBTC, might indicate that traditional finance is becoming more involved in the cryptocurrency space. The narrowing of the GBTC discount and Grayscale's product trading with an implied share price closer to the Bitcoin spot price is seen as a positive sign. However, not all institutional players are increasing their holdings, as evidenced by ARK Invest reducing its GBTC holdings despite the product's gains.
In summary, the increased activity in Bitcoin investment products and the potential for a Bitcoin spot ETF are driving significant interest and investment in the cryptocurrency space, particularly within the institutional sector. This trend could indicate a growing acceptance of cryptocurrency in traditional financial markets.
