Two weeks ago, BlackRock suddenly a request for an Exchange Traded Fund (ETF). bitcoin (BTC). Before that time, many ETFs were eerily quiet, but that doesn’t seem to have changed. One of the most popular ETFs saw the biggest weekly inflows in a year.
A lot of money flows into Bitcoin fund
This is evident from an analysis by Bloomberg researcher Eric Balchunas. In one week, about $65.3 million US dollars flowed into ProShares’ Bitcoin Strategy ETF with the ticker BITO. The market value even peaked at around 1 billion dollars.
The stock market closed last Friday when the fund’s price stood at $17.41. Mcurrently the fund has approx $891 million in assets under management, making it one of the more popular funds based on bitcoin futures among institutional investors.
Half a billion of these shares were also traded last Friday. That’s only five times since the ETF was introduced end of 2021 happened. Balchunas also emphasizes that BITO ‘almost perfectly’ followed the actual bitcoin price.
The price differs annually by only 1.05% from the actual price. The annual commissions that you pay as a trader are also only 0.95%. That is very little, because because the fund is based on futures, it is actively managed. The price of these types of funds usually deviates from the price of what it should reflect, in this case bitcoin.
The Bitcoin Futures ETF $LITTLE 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
Crypto traders positive
The interest in bitcoin is reflected in the interest in Grayscale’s GBTC. Unlike BITO, this fund is less correlated to the price of bitcoin. It sometimes even trades at a hefty premium or discount.
BlackRocks train application of a bitcoin ETF, GBTC suddenly revived. Grayscale has been wanting to convert this fund into a so-called spot ETF for some time, which should track the price of bitcoin much more accurately. Thanks to BlackRock, investors got the hope that Grayscale would also succeed. Currently GBTC is trading at a significant discount, this news made it a lot smaller.