Investors are once again excited about the possibility of a Bitcoin exchange-traded fund (ETF) and its potential impact on the market. Recent reports suggest that new ETF applications have already been submitted, and institutional investors are investing large amounts of funds into the ETFs.
Bloomberg senior ETF analyst Eric Balchunas was one of the first sources that noticed the pump in Bitcoin ETFs US. Apparently, there was a huge flow of funds into the ProShares Bitcoin Strategy ETF (BITO). The ProShares Bitcoin Strategy ETF (BITO) is a Bitcoin futures fund that had its largest weekly inflow in a year at $65.3 million. Additionally, it was also recorded that the assets trading within this fund reached a whopping $1 billion mark.
If you are still confused about how Bitcoin ETFs work, let's give you an overview. Bitcoin ETFs are basically financial assets that track the value of Bitcoin and allow investors to make profits from the price movements of the asset.
But here's the catch, instead of trading these financial assets on a crypto exchange, they are bought, sold, and traded in a traditional stock exchange. Many mainstream investors are not knowledgeable of how crypto trading works. So having a Bitcoin ETF stock gives the opportunity to get exposure and trade assets relating to Bitcoin in a stock exchange.
To the current news, Bloomberg senior ETF analyst Eric Balchunas observed an uptick in the investments in the ProShares Bitcoin Strategy ETF (BITO). Apparently, the weekly inflow of $65.3 million was recorded by the expert ETF strategist. This can only mean one thing. Interest in the Bitcoin ETF has been awakened again, and traders/investors are all trying to push more investments in assets closely related to Bitcoin.
Despite the BITO fund making a 59.6% gain since the start of 2023, other Bitcoin ETF US funds are also appreciating. According to the Deribit crypto options exchange, Bitcoin futures open interest (OI) has increased by more than 30% within the last week.
Is SEC Changing Their Position Towards Bitcoin ETF?
If you are new to the crypto industry, you may be curious as to why there is such excitement around the rise of Bitcoin ETFs. The reason behind it is related to US regulations.
The approval process for Bitcoin ETFs in the US market has been quite challenging. It's important to note that most Bitcoin ETFs are based on futures and spots. However, the SEC has yet to approve any Bitcoin ETF that's directly linked to spot Bitcoin. Considering this, it was quite a surprise.
With this in mind, it was quite surprising when the news broke out that the Securities and Exchange Commission approved a leveraged Bitcoin ETF. The name of the newly approved leveraged Bitcoin ETF is the 2x Bitcoin Strategy ETF, which is expected to be in the market on the 27th of June. The 2x Bitcoin Strategy ETF is the first leveraged ETF on the Bitcoin price trend in the United States.
Not only that, the approval of this ETF by the SEC is huge news as it would give diverse investors access to trade Bitcoin-related assets. With the new inflow of investments in Bitcoin ETFs and the newly approved leveraged ETF, everything looks good for the apex cryptocurrency.