Institutions are Adopting Crypto, Deutsche Börse’s Bitcoin ETF Trading Volume Nears Traditional ETFs

German exchanges hosting the bitcoin ETF recorded volumes equivalent to many of its popular traditional exchange-traded funds.  Bitcoin Exchange-Traded Crypto (BTCE), Deutsche Börse ETF  is one such product currently in high demand and recorded an average daily trading volume of  €57m in the first 11 days of January, reported Financial Times.

The Bitcoin ETF traded just short of the most popular ETF INRG which recorded a trading volume of only a million more than BTCE.

Bitcoin ETF is still a distant dream for US investors but it is legal in Europe, because of which many mainstream traditional exchanges list these bitcoin pegged products. Many believe US regulators might approve Bitcoin ETF owing to the growing market cap of nearly $100 billion and a great surge in institutional interest.

Stephan Kraus, head of Deutsche Börse’s ETF segment believed that the

“The structure of the BTCE exchange-traded note, which eased the regulatory concerns and counterparty risk involved in trading bitcoin, had increased the appeal of cryptocurrency investments for institutional investors that can trade without needing to set up specialized digital infrastructure or use an “unregulated crypto platform”.

Bitcoin-Pegged Exchange Products Would Become More Common With Regulatory Ease

The surge in demand for such Bitcoin pegged products has seen a significant bump suggesting rising institution interest in the top cryptocurrency. It also shows that institutions that have chosen gold as their hedge against the troubled financial times no more see it as the only store-of-value asset, bitcoin is slowly but surely eating away gold’s market.

Not just German Bitcoin ETP, even the surging volume of Grayscale who also offers a similar product that tracks the price of Bitcoin has recorded an average daily trading volume of near a billion US Dollars for the first two weeks of 2021, showing that institutions are betting big on bitcoin.

The institutional inflow in crypto has just begun with the likes of MicroStrategy using Bitcoin as a Treasury asset, more use cases, and products would arise shortly as the regularity clampdowns are cut short.

The US regulators in the past have rejected several ETF applications citing the crypto market to be too small to handle the exchange-traded funds. However, that seems to have changed quite fast with the ongoing bull run.