The craze for Bitcoin (BTC) exchange-traded funds (ETF) has returned with a slew of new applications and a surge in capital inflows from institutional investors.
On June 26, Eric Balchunas, Senior ETF Analyst at Bloomberg, observed a surge in inflows into the ProShares Bitcoin Strategy ETF (BITO) – a Bitcoin futures fund.
The fund saw its largest weekly inflow in a year at $65.3 million and its assets surpassed $1 billion.
BITO was the first BTC-pegged ETF in the United States and is one of the most popular among institutional investors.
Balchunas claimed that BITO has “tracked Bitcoin almost perfectly,” lagging spot prices by 1.05% annually and charging a 0.95% fee.
According to ProShares, the BITO fund has gained 59.6% since the beginning of 2023. Since BlackRock applied for its own Bitcoin ETF on June 15, interest in Bitcoin derivatives has surged across the board.
According to crypto options exchange Deribit, open interest (OI) for bitcoin futures has surged since last week. As of June 25, it currently stands at $319 million, up about 30% from the same period last week.
The OI is a measure of the total number of outstanding futures contracts that have not been settled.
BTC futures OI last month. Source: Deribit
The revival of ETF trading and the resulting BTC price surge was also good news for the world’s largest crypto asset manager, Grayscale. Grayscale Bitcoin Trust (GBTC), which has traded at a massive discount to BTC prices for months, is on track as this gap narrows.
According to Coinglass, the grayscale premium, also known as the discount, is -31.2%. In December it fell as low as -49%.
Related: The Volatility Shares Trust aims to list a leveraged bitcoin futures ETF
It remains unclear whether the Securities and Exchange Commission (SEC) will approve a spot Bitcoin ETF, but the race is now on as BlackRock is followed by a fresh wave of filings.
WisdomTree filed with the SEC for the third time to create a spot Bitcoin ETF, just hours later Invesco renewed its application for a similar product.
On June 25, ETF Store President Nate Geraci tweeted his list of ETF issuers that he “would keep an eye on” as he expects them to apply or reapply for a spot bitcoin ETF based on past filings become. Geraci named First Trust, VanEck, Global X, Fidelity and what he called the “dark horse” Schwab.
Magazine: Unstable Coins: Depegging, bank runs and other risks loom
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.