ProShares Bitcoin Strategy ETF Sees Largest Inflows From Institutional Players In A Year
Following a flood of spot Bitcoin ETF applications last week, there’s been a massive inflow of institutional money back into the crypto market.
On Monday, June 26, Bloomberg senior ETF analyst Eric Balchunas reported a surge in inflows for the ProShares Bitcoin Strategy ETF (BITO) — a Bitcoin futures fund. At $65.3 million, the BITO fund saw its largest weekly inflow with total assets topping to more than $1 billion.
The ProShares Bitcoin Strategy ETF (BITO) was the first BTC-linked ETF launched in the United States and thus among the most popular among institutional investors. Balchunas noted that last Friday, BITO traded a total of half a million dollars in cash.
He added: “Interesting thing re $BITO, even tho it got trashed by some bc futures roll costs yada yada, it pretty much has tracked bitcoin perfectly. It's lagged spot by 1.05% ann, but it's fee is 0.95% = only 10bps of roll (extra) costs, which is rounding error. Many predicted >5% a yr”.
Since the beginning of the year 2023, the BITO fund has delivered gains of 59.6%. Thus, it is pretty much in tune with the gains made by Bitcoin this year.
Ever since BlackRock filed for the spot Bitcoin ETF earlier this month on June 15, there’s been an uptick in the Bitcoin derivatives interest across the board. Bitcoin futures open interest (OI) on the Deribit crypto options exchange has experienced a notable increase in recent times, particularly since last week. As of June 25, the OI stands at $319 million, marking a surge of approximately 30% compared to the same period last week.
Open interest (OI) serves as a metric to measure the total number of outstanding futures contracts that remain unsettled.
The resurgence of trading in Exchange-Traded Funds (ETFs) and the subsequent upward movement in the price of Bitcoin (BTC) has brought positive news for Grayscale, the largest crypto asset manager globally. The Grayscale Bitcoin Trust (GBTC), which had been trading at a significant discount to the spot BTC prices for several months, is now moving in the right direction as the gap between the two narrows.
According to Coinglass, the Grayscale premium, also referred to as its discount, currently stands at -31.2%. It had reached its lowest point at -49% in December.
Also, after nine consecutive weeks of outflows, the crypto investment products also witnessed the largest single weekly inflows since July 2022, totalling US$199m.
Last week, Bitcoin experienced inflows of US$188 million, making it the major recipient and accounting for 94% of the total flows. Conversely, short-bitcoin positions witnessed outflows for the ninth consecutive week, totaling US$4.9 million. The outflows over the nine weeks accounted for 60% of the total Assets under Management (AuM).
On the other hand, Ethereum received inflows of US$7.8 million, which represented a mere 0.1% of the AuM compared to Bitcoin's inflows at 0.7%. This suggests that the current demand or interest for Ethereum is lower than that for Bitcoin.