Bitcoin ETF Craze Returns: Biggest Inflow to ProShares’ BITO in a Year

The price of Bitcoin experienced a decline, reaching $30,412, but the Bitcoin ETF excitement has resurfaced with a flood of new applications and increased capital inflows from institutional investors.

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Eric Balchunas, a senior ETF analyst at Bloomberg, observed a surge in inflows into the ProShares Bitcoin Strategy ETF (BITO), a fund that invests in Bitcoin ETF

The fund saw its largest weekly inflow in a year, totaling $65.3 million, bringing its assets to more than $1 billion. BITO, the first bitcoin-linked ETF in the United States, is growing in popularity among institutional investors.

Balchunas pointed out that BITO has closely tracked Bitcoin’s performance, trailing spot prices by 1.05% annually and charging a 0.95% fee. According to ProShares, the fund has gained 59.6% since the beginning of 2023. Interest in bitcoin derivatives has also increased after BlackRock filed for its own bitcoin ETF on June 15. Open interest in bitcoin futures on the Deribit exchange rose to $319 million as of June 25, up 30% from the previous week.

The revival of ETF trading and the resulting rise in the Bitcoin price has brought positive news to Grayscale, the world’s largest crypto asset manager. The Grayscale Bitcoin Trust (GBTC), which has been trading at a significant discount to spot Bitcoin prices for months, is now narrowing the gap. Coinglass reported that the Grayscale premium/discount is currently at -31.2%, a significant improvement from the -49% low in December.

While it remains uncertain whether the Securities and Exchange Commission (SEC) will approve a spot Bitcoin ETF, the race is on as a new wave of filings follows BlackRock’s announcement. WisdomTree applied to the SEC for a spot bitcoin ETF for the third time, and shortly after Invesco renewed its application for a similar product.

Nate Geraci, president of the ETF Store, published a list of ETF issuers to keep an eye on, suggesting that they are likely to apply or reapply for a spot bitcoin ETF based on their previous filings. Geraci mentioned First Trust, VanEck, Global X, Fidelity, and referred to Schwab as the “dark horse.”

The SEC’s approval of a spot Bitcoin ETF would be a significant milestone for the cryptocurrency market and would open the door for more traditional investors to gain exposure to Bitcoin without directly owning the underlying asset. The anticipation of ETFs has sparked renewed interest in Bitcoin and could potentially drive its price even higher in the future.

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(Featured image by Kanchanara via Unsplash)

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