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

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

Bitcoin (BTC) institutional investment vehicles are experiencing a significant surge in volume as excitement builds over potential regulatory changes in the United States.

Data from sources like Bloomberg shows that Bitcoin exchange-traded funds (ETFs) and other investment options are seeing near-record weekly inflows.

BITO, GBTC trade $2.5 billion

The possibility of a Bitcoin spot price-based ETF being allowed in the U.S. has not only affected the price action of BTC itself but has also benefited the surrounding ecosystem.

In addition to exchanges and mining firms, institutional investment options that have faced challenges are also experiencing renewed demand.

According to Bloomberg senior ETF analyst Eric Balchunas, at least two well-known investment vehicles saw notable trading volume in the week leading up to October 27.

One of them was the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF approved in the U.S. in 2021.

“$BITO traded $1.7b last week, the second-largest week since its initial release,” wrote Balchunas in his commentary.

He also mentioned that the Grayscale Bitcoin Trust (GBTC) traded $800 million, helping to reduce its discount to the Bitcoin spot price, which reached a two-year low.

“That’s $2.5b (placing it in the top 1% among ETFs) invested in two less desirable methods (compared to spot) for exposure. While it is unlikely that spot ETFs will set records on the first day, it is clear that there is an audience,” concluded the post.

Others also took note of this 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 previously reported, GBTC has had a remarkable comeback in recent months, even before BTC/USD gained 15% last week.

Related: US court issues mandate for Grayscale ruling, paving way for SEC to review spot Bitcoin ETF

Legal victories in the long journey to gain approval to convert GBTC into a spot ETF have ignited interest, and Grayscale’s product now trades with an implied share price that is only 13.1% below the BTC spot price.

According to data from monitoring resource CoinGlass, this is the lowest discount since November 2021, when Bitcoin reached its all-time highs.

“The GBTC discount keeps narrowing,” popular Bitcoin and altcoin trader Mister Crypto 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 line with the increase in share price.

While ARK itself plans to launch a Bitcoin spot ETF, GBTC currently represents 10.24% of its ARK Next Generation Internet ETF (ARKW), marking its first change since November 2022.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.