Bitcoin ETFs attract big investors

Bitcoin exchange-traded funds (ETFs) are in high demand again, with new requests and more money from big investors.

On June 26, Bloomberg's senior ETF analyst Eric Balchunas noticed a lot of money flowing into the ProShares Bitcoin Strategy ETF (BITO). This ETF is linked to Bitcoin, a type of digital money. BITO had its biggest weekly input in a year, getting $65.3 million and bringing its total value to over $1 billion.

BITO was the first ETF in the U.S. connected to Bitcoin and is very popular with big investors. Balchunas said that BITO almost matches Bitcoin's price changes perfectly, with a small yearly difference of 1.05%. It has a cost of 0.95%.

Since the start of 2023, the value of BITO has gone up by 59.6% according to ProShares, the company behind it. Interest in Bitcoin has increased since BlackRock, another company, applied to create its own Bitcoin ETF on June 15.

This renewed interest in ETFs and the rising price of Bitcoin has benefited Grayscale, the world's largest manager of digital money. Grayscale's Bitcoin Trust (GBTC) has been cheaper than Bitcoin for a while, but that difference is getting smaller. According to Coinglass, GBTC's discount has decreased to -31.2% from -49% in December.

It's not known if the U.S. Securities and Exchange Commission (SEC) will allow an ETF based on Bitcoin's real-time price, but many companies have applied after BlackRock's attempt. WisdomTree applied for the third time, and Invesco also applied again.

Nate Geraci, president of ETF Store, suggested on June 25 that we watch certain companies. He thinks they may apply for a Bitcoin ETF based on his knowledge of past attempts. These companies are First Trust, VanEck, Global X, Fidelity, and what he referred to as the "dark horse," Schwab.