Bitcoin ETF fever returns: ‘Biggest’ inflow to ProShares’ BITO in a year

Surge of Investments into Bitcoin ETF

The enthusiasm for a Bitcoin (BTC) exchange-traded fund (ETF) has been reignited with a plethora of new applications and a surge in capital investments from institutional investors.

On June 26th, Eric Balchunas, a senior ETF analyst at Bloomberg, noticed a surge of investments into the ProShares Bitcoin Strategy ETF (BITO), a fund which focuses on Bitcoin futures.

The fund experienced its highest weekly influx in a year of $65.3 million, bringing its total assets to more than $1 billion.

BITO was the pioneering BTC-linked ETF in the United States and is widely favored by institutional investors.

Balchunas asserted that BITO “has almost exactly tracked Bitcoin,” with a yearly difference of 1.05% and a fee of 0.95%.

The ProShares report states that the BITO fund has seen an increase of 59.6% since the beginning of 2023. Since BlackRock submitted its application for a Bitcoin ETF on June 15, there has been a general surge in the demand for Bitcoin derivatives.

The Deribit crypto options exchange has reported that Bitcoin futures open interest (OI) has risen significantly since last week. As of June 25th, the OI figure stands at $319 million, which is an increase of approximately 30% from the week before.

OI stands for Open Interest and is a measure of the total amount of outstanding futures contracts that remain unsettled.

Increased Trading of ETFs and Grayscale Bitcoin Trust

The increased trading of ETFs and the subsequent surge in the Bitcoin (BTC) price has been beneficial to the world’s largest cryptocurrency asset manager, Grayscale. The Grayscale Bitcoin Trust (GBTC), which has been trading at a significant discount to the spot BTC prices for a while, is now showing signs of improvement as the gap between the two narrows.

Coinglass reports that the Grayscale premium, otherwise known as its discount, is currently at -31.2%. This marks a decrease from its lowest point of -49% in December.

The Volatility Shares Trust is aiming to list a leveraged Bitcoin futures ETF.

It is still uncertain if the Securities and Exchange Commission (SEC) will give the green light to a Bitcoin ETF, but the competition is intensifying as more filings have been made after BlackRock’s.

WisdomTree, for the third occasion, submitted a request to the SEC to establish a spot Bitcoin ETF, and shortly afterwards Invesco followed suit by refreshing its application for a similar product.

Nate Geraci, President of ETF Store, recently tweeted a list of ETF issuers that he believes will soon file or refile for a Bitcoin ETF, based on their past filings. Geraci named First Trust, VanEck, Global X, Fidelity, and the “dark horse,” Schwab, as the issuers to keep an eye on.

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