Bitcoin ETFs Gain Momentum Amid Digital Asset Boom: 'Investors Are Asking For It' And Institutions Want To 'Incorporate Digital Assets,' Says Grayscale

The digital asset landscape is experiencing a significant surge, with Bitcoin BTC/USD exchange-traded funds emerging as a pivotal force driving institutional adoption.

What Happened: David LaVall, the global head of ETFs at Grayscale Investments, told Benzinga that the introduction of spot Bitcoin ETFs at the beginning of 2024 marked an “incredible” inflection point, drawing in a substantial number of institutional players.

“As we’re a little bit over a year, what we are looking at is some of the largest institutions in the form of wealth managers, firehouse platforms looking to figure out how they exactly incorporate digital assets into their franchises,” LaVall stated.

He emphasized that the demand is coming directly from investors, “Investors are asking for it, this is a unique opportunity where the democratization of an asset class, which is what ETFs have done historically, is happening for digital assets.”

LaVall highlighted the strong appeal of the robust, institutional-grade infrastructure now available for digital asset investments. “When they come and they talk to us they’re very pleased to see the infrastructure that is institutional grade,” he added.

However, he also highlighted that Bitcoin may not belong in every portfolio.

“We are not here to say that Bitcoin belongs in every single client’s portfolio, but we mean to say that you need to educate yourself, you need to partner with a crypto expert,” he said.

Why It Matters: The rise of Bitcoin ETFs has provided traditional investors with a regulated and accessible pathway into the cryptocurrency market.

Grayscale’s offerings, such as the Grayscale Bitcoin Trust GBTC and the Grayscale Bitcoin Mini Trust ETF BTC, have been key players in this institutional shift.

GBTC, which converted to a spot Bitcoin ETF in January 2024, has seen significant activity, reflecting both the enthusiasm and some initial profit-taking from long-term holders.

It was up 12.25% on a year-to-date basis and 42.60% over the last year.

The Grayscale Bitcoin Mini Trust ETF, launched more recently, was up 12.91% on a year-to-date basis and 68.32% since its inception in July 20204.

Price Action: As of the publication of this article, Bitcoin was 0.9% lower at 108,735 per coin.

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Wednesday. The SPY was down 0.17% to $590.17, while the QQQ declined 0.12% to $520.58, according to Benzinga Pro data.