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Spot Bitcoin ETFs are approved by the SEC and allowed to begin trading on Thursday
Key points
- The US Securities and Exchange Commission approved 11 Bitcoin exchange-traded fund (ETF) applications.
- Spot Bitcoin ETFs are expected to begin trading on Thursday.
- Spot bitcoin ETFs will help make cryptocurrency investing more accessible, bringing more investors and resources into the crypto space.
Spot bitcoin exchange traded funds (ETFs) will be allowed to begin trading on Thursday after receiving regulatory approval on Wednesday from the US Securities and Exchange Commission (SEC).
11 Spot Bitcoin ETFs approved
The regulator has given the green light to the following products:
- ARK 21Shares Bitcoin ETF (ARKB)
- Bitwise Bitcoin ETF (BITB)
- Fidelity Wise Origin Bitcoin Trust (FBTC)
- Franklin Bitcoin ETF (EZBC)
- Grayscale Bitcoin Confidence (GBTC)
- Bitcoin Hashdex ETF (DEFI)
- Invesco Galaxy Bitcoin ETF (BTCO)
- iShares Bitcoin Trust (IBIT)
- Valkyrie Bitcoin Fund (BRRR)
- VanEck Bitcoin Trust (HODL)
- WisdomTree Bitcoin Fund (BTCW)
In an attempt to attract investors, many issuers they have cut and offered spot fee waivers on bitcoin ETFs before the SEC’s nod.
A long wait for Spot Bitcoin ETFs
The road to approval of a Spot Bitcoin ETF in the United States. The journey began in 2013, when an entity affiliated with the Winklevoss twins submitted the first application for such a financial product to the SEC.
Although the request was ultimately rejected, Bitcoin ETFs based on futures products were finally approved by the SEC starting in 2021. Until now, a large number of applications for spot-based bitcoin ETFs had been rejected on the grounds that the unregulated nature of bitcoin creates too many risks for investors. Cryptocurrency asset manager Grayscale eventually sued the SEC impose greater clarity on the issue.
However, it was from Blackrock (BLK) application for a spot bitcoin product in June last year the idea gained momentum. When the investment giant of traditional finance entered the arena, many others such as Fidelity and Franklin Templeton followed suit. This was seen as a sign that regulatory approval was on the way due to the central role of corporations in the US financial system.
As regulators and issuers went back and forth to iron out the details, there were some last-minute snags. An unauthorized post announcing the endorsement on social media platform X from the SEC account on Tuesday sent bitcoin prices soaring above $48,000 before the regulator clarified that his account
What this regulatory approval means for Bitcoin
The SEC approval serves as a significant regulatory seal of approval for the world’s largest crypto asset, likely reducing some investor fears about investing in the sector. Not only does it bring greater regulatory guarantees, but it allows investors to invest with established financial companies. But SEC Chairman Gensler warned investors to consider the risks before putting their money into the product.
“While we have approved the listing and trading of certain spot bitcoin ETP shares today, we have not approved or supported bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to cryptocurrencies” , Gensler said in a statement. .
Until now, retail investors were only able to gain exposure to cryptocurrency by purchasing coins directly or through ETFs that trade cryptocurrency futures. A bitcoin spot ETF will allow investors, especially retail investors, to access bitcoin without having to hold their investment in a bitcoin wallet. Instead, they simply hold the ETFs in their brokerage account.
Analysts expect significant amounts of money to flow into spot bitcoin ETFs, and this optimism has helped boost the price of bitcoin substantially in recent months.
According to Bloomberg Intelligence estimates, the spot market for bitcoin ETFs could grow to $100 billion over time. Financial services provider Galaxy estimates that spot bitcoin ETF product inflows could rise from $14 billion in the first year to $39 billion within three years.
Update: January 10, 2024: This article has been updated to add comments from the SEC.