Institutional Demand Surges: Purpose Bitcoin ETF Hits ATH

The largest Canadian Bitcoin ETF is hitting back-to-back all-time highs with respect to its BTC holdings as inflows intensified.

Purpose Bitcoin ETF Sees Huge Infusion Of Capital

Citing data from the blockchain intelligence platform, Glassnode, market analyst Jan Wüstenfeld revealed that Purpose Bitcoin ETF currently holds more than 36k BTC, meaning a 23% increase in holdings YTD. The exchange-traded fund concluded with an AUM of 34.07k BTC last week, adding more than 2k BTC this week.

Oh btw. the the Canadian Purpose #Bitcoin ETF has just hit another ATH yesterday of 36.27k $BTC. Last week the ETF ended with an AUM of 34.07k bitcoin. That’s more than 2k bitcoin added this week so far… pic.twitter.com/7pf5dtsCmx

— Jan Wüstenfeld 🇺🇦 (@JanWues) March 25, 2022

The latest news comes at a time when Bitcoin’s price has been improving despite persistent geopolitical tensions. Over the past week, the largest cryptocurrency was up by more than 11% and touched $45,000 earlier today.

Purpose Bitcoin ETF is the first spot-driven ETF not just in North America but also in the world. The investment vehicle holds actual Bitcoin rather than a futures contract and was launched by Purpose Investments under the ticker BTCC in February 2021. Just one month after it went live, the ETF raked in $1 billion of assets under management, making it one of the fastest-growing ETFs.

Despite giving the nod to some investment vehicles linked to BTC futures last year, the US Securities and Exchange Commission has denied the listing of any spot Bitcoin ETFs so far.

However, Bloomberg Intelligence analysts James Seyffart and Eric Balchunas believe this could change. In a recent post to clients, the duo wrote that a proposed rule amendment to change the definition of “exchange” by the regulatory watchdog could lead to spot ETFs receiving a green signal by mid-2023.

New note out on why we think spot bitcoin ETFs will get approved in early Summer 2023. The SEC is proposing to expand the definition of “exchange” which would bring crypto platforms under SEC reg. After that (which could take a year) look for ETFs to get green light via @JSeyff pic.twitter.com/TtFgFXrJ8h

— Eric Balchunas (@EricBalchunas) March 24, 2022

BITO’s Growing Bitcoin Exposure

Apart from the physically-settled Bitcoin ETF, ProShares’ Bitcoin Strategy ETF (BITO) has also grown to a fresh high of more than 28k BTC after noting weeks of solid inflows. This was revealed by a recent edition of Arcane Research that said,

“Strong inflows into futures-ETFs may have spill-over effects on Bitcoin’s price as market makers chase for delta-neutrality, leading them to accumulate more in the spot market to offset any possible net short exposure.”

The analytic company also noted that the strong inflows to BITO essentially demonstrated that appetite for the largest cryptocurrency through traditional investment vehicles is on the rise.