Bitcoin (BTC) continues to close above $34,000 and aims for higher peaks after 17 months. Many events have boosted investors’ hopes. The ongoing institutional demand also shows how this BTC rally could mark the end of the bear season. We will see if this perspective is correct or not in the coming months.
Will Cryptocurrencies Rise?
Data coming from the institutional side is particularly promising for investors. The upcoming CoinShares report, to be released on Monday, is already arousing curiosity. Increased optimism about ETF approval has led to increased institutional demand and the erosion of GBTC discounts.
BTC investment vehicles preferred by institutional and accredited investors are experiencing significant volume increases due to the excitement of a possible ETF approval in the United States. Open positions are racing towards $30 billion, and all of this data indicates that institutional demand could end the bear season.
Data provided by Bloomberg reflects the increasing interest in ProShares Bitcoin Strategy ETF (BITO) and GBTC. Bloomberg senior ETF analyst Eric Balchunas wrote the following:
“BITO traded $1.7 billion last week, and now we are in the second week where we can say it’s crazy in terms of volume.”
Is the Bitcoin Bull Starting?
Balchunas believes that there could be further increases because Grayscale Bitcoin Trust has surpassed the $800 million volume threshold. Amidst intense demand, those who want to buy discounted GBTC and then sell it profitably after ETF approval are in a rush. This ensures that the BTC price remains strong, even if volumes on crypto exchanges decrease.
William Clemente, co-founder of crypto research firm Reflexivity, says similar things. According to him, the wolves of traditional finance see something that individual investors are not aware of or really know what will happen. Grayscale’s product, GBTC, is currently trading at a 13% discount. This rate had dropped to nearly half of the level it should be at, surpassing 48.5% in the past.
According to CoinGlass data, the discount, which had dropped to 13% days ago, is the lowest level seen since November 2021. Crypto expert Mister Crypto evaluates the situation as follows:
“The GBTC discount continues to narrow. Maybe TradFi (traditional finance) knows something we don’t know yet…”
On the other hand, ARK Invest saw this as a selling opportunity with the drop in negative premium and reduced its asset holdings.
