ProShares’ BITO sees biggest inflow in a year due to return of Bitcoin ETF fever.

The excitement surrounding Bitcoin exchange-traded funds (ETFs) is back with a slew of new applications and increased capital inflows from institutional investors.

On June 26, Bloomberg senior ETF analyst Eric Balchunas observed a surge of inflows to the ProShares Bitcoin Strategy ETF (BITO) — a Bitcoin futures fund.

The fund saw its largest weekly inflow in a year at $65.3 million, with its assets reaching over $1 billion.

BITO was the first BTC-linked ETF in the United States and is among the most popular among institutional investors.

Balchunas stated that BITO has “pretty much tracked Bitcoin perfectly,” with annual lagging spot prices of 1.05% and 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

The BITO fund has gained 59.6% since the beginning of 2023, according to ProShares. Since BlackRock filed for its own Bitcoin ETF on June 15, there has been a rise in Bitcoin derivatives interest across the board.

According to the Deribit crypto options exchange, Bitcoin futures open interest (OI) has surged since last week, currently standing at $319 million as of June 25, up roughly 30% from the same period last week.

OI is a metric that measures the total number of outstanding futures contracts that have not been settled.

The resurgence in ETF trading and the resulting BTC price pump has also been good news for the world’s largest crypto asset manager, Grayscale. The Grayscale Bitcoin Trust (GBTC), which has been trading at a significant discount to spot BTC prices for months, is moving in the right direction as that gap narrows.

According to Coinglass, the Grayscale premium, also known as its discount, is -31.2%. It fell as low as -49% in December.

Related: Volatility Shares Trust aims for listing of leveraged Bitcoin futures ETF

It is still unknown whether the Securities and Exchange Commission will approve a spot Bitcoin ETF, but a new wave of filings has followed BlackRock’s.

WisdomTree filed with the SEC for the third time to create a spot Bitcoin ETF, and Invesco renewed its application for a similar product just hours later.

On June 25, ETF Store President Nate Geraci tweeted his list of ETF issuers that he “would keep an eye on” as he believes they will file or refile for a spot Bitcoin ETF based on past filings. Geraci named First Trust, VanEck, Global X, Fidelity, and what he called the “dark horse,” Schwab.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

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