First Bitcoin ETF trades for $1.5 billion

Bitcoin Institutional investment vehicles have seen a significant increase in trading volumes amid excitement over possible regulatory changes in the United States.

Data from sources including Bloomberg shows weekly inflows into Bitcoin exchange-traded funds (ETFs) and other funds are nearing record levels.

BITO, GBTC trade $2.5 billion

The suggestion that the United States may soon allow ETFs based on Bitcoin spot prices has not only affected the price trend of BTC, but the surrounding ecosystem has also benefited.

Beyond exchanges and mining companies, beleaguered institutional investment options are also seeing a revival in demand.

As Bloomberg Senior ETF Analyst Eric Balchunas noted, at least two household names saw significant volume in the trading week ending October 27.

This includes the ProShares Bitcoin Strategy ETF (BITO), the first futures ETF approved in the United States in 2021.

Stalwart Grayscale Bitcoin Trust’s (GBTC) volume hit $800 million, helping push its discount to Bitcoin’s spot price to a two-year low. This puts $2.5 billion (top 1% of ETFs) into two less-than-ideal exposure methods (relative to spot), although we think spot ETFs are unlikely to set records on day one.

Others have also paid attention to the data, with William Clemente, co-founder of cryptocurrency research firm Reflexivity, describing ETF trading as fully recovered.

According to reports, GBTC has staged a significant rally in recent months, even before BTC/USD surged 15% last week.

Built by a legal victory on the long road to gaining permission to convert GBTC into a spot ETF, Grayscale’s product now trades at an implied share price that’s just 13.1% below the BTC spot price.

This is the lowest level since November 2021, when Bitcoin itself was at all-time highs, according to data from monitoring resource CoinGlass.

Despite this, investment management firm ARK Invest reduced its holdings on GBTC as the share price rose.

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

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