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The Bitcoin (BTC) exchange-traded fund (ETF) is making a comeback with a host of new applications and increased capital inflows from institutional investors.
On June 26, Bloomberg Senior ETF Analyst Eric Balciunas observed a surge in inflows from the ProShares Bitcoin Strategy ETF (BITO), a Bitcoin futures fund.
The fund had the largest weekly inflow for the year of $65.3 million and had assets in excess of $1 billion.
BITO was the first BTC-pegged ETF in the US and one of the most popular among institutional investors.
Balciunas stated that BITO is “pretty much excellent at tracking bitcoin”, lagging spot prices by 1.05% per year and charging a fee of 0.95%.
The Bitcoin Futures ETF $BITO had its biggest weekly inflow in a year as assets top $1b again. It also traded half a billion in shares on Friday, which it’s only done about 5 times before via @SirYappityyapp pic.twitter.com/Xrq0lUaaTO
— Eric Balchunas (@EricBalchunas) June 25, 2023
According to ProShares, the BITO fund has earned 59.6% since the beginning of 2023. After BlackRock filed for its own bitcoin ETF on June 15, interest in bitcoin derivatives skyrocketed.
Open interest in bitcoin futures (OI) has risen since last week, according to data from cryptocurrency options exchange Deribit. It currently stands at $319 million as of June 25, up about 30% from the same period last week.
OI is a measure of the total number of outstanding futures contracts.
The resurgence of ETF trading and the consequent surge in BTC prices was also good news for the world’s largest crypto asset manager, Grayscale. Grayscale Bitcoin Trust (GBTC), which has been trading at a huge discount to BTC spot prices for months now, is moving in the right direction as that gap narrows.
The grayscale premium, also known as the rebate, is -31.2%, according to Coinglass. In December, it fell to -49%.
Related: Volatility Shares Trust Targets Leveraged Bitcoin Futures ETF Listing
It remains unclear whether the Securities and Exchange Commission (SEC) will approve a spot bitcoin ETF, but the race has already begun as a new wave of applications followed BlackRock.
WisdomTree filed for the third time with the SEC to create a spot bitcoin ETF, just a few hours later Invesco renewed the application for a similar product.
On June 25, ETF Store president Nate Geraci tweeted his list of ETF issuers he will “watch” as he believes they will be filing or re-bidding for Bitcoin spot ETFs based on past filings. Geraci named First Trust, VanEck, Global X, Fidelity and what he called the “dark horse” Schwab.