Posted: January 10, 2024 4:44 PM Updated: January 10, 2024 4:56 PM
Correction and fact check date: January 10, 2024, 4:44 p.m.
briefly
The US SEC today approved the issuance of a Spot Bitcoin ETF, ending months of anticipation and confirming rumors of its approval.
The U.S. Securities and Exchange Commission (SEC) today approved the issuance of a spot Bitcoin exchange-traded fund (ETF), ending months of anticipation within the digital asset sector. More than a dozen companies have filed applications with the SEC seeking approval for these investment products.
After several weeks of turmoil, regulators finally granted approval to all applicants.
The SEC’s approval marks a significant milestone for the industry, paving the way for major asset management firms including BlackRock, Grayscale, and Valkyrie to launch their own Bitcoin-focused ETFs that are poised to reshape the digital asset investment landscape.
While U.S. investors have had access to Bitcoin futures ETFs for some time, the SEC has shown reluctance to approve spot ETFs specifically designed to reflect Bitcoin’s real-time price movements.
The decision is being hailed as a game-changer for the industry as Bitcoin is expected to become more widely accepted as an investment asset following the introduction of spot ETFs. The ripple effect could extend to other digital assets, exposing them to similar investment opportunities.
🚨Breaking News🚨
Bitcoin ETF Approved by SEC
It definitely looks like this: #Bitcoin The ETF approval order reached the SEC website, but the link no longer works. That said, this article seems accurate to me: https://t.co/NhJueWNPJ0 pic.twitter.com/W0ipnlg3j1
— James Seyff (@JSeyff) January 10, 2024
The process of getting approval was not that smooth. It started in July 2013 when Cameron and Tyler Winklevoss presented the idea for the Winklevoss Bitcoin Trust. The SEC, concerned about Bitcoin’s unpredictable market fluctuations and risks to investors, officially said “no” to their proposal in March 2017. These rejections established a pattern of rejecting various Bitcoin ETF proposals in the following years.
Today’s pivotal development also follows Grayscale Investments’ significant victory over the SEC. A federal appeals court overturned the denial of Grayscale’s application to convert a Bitcoin trust into an ETF, noting that the commission had failed to provide a clear rationale for disparate treatment of similar products. In particular, an ETF holding Bitcoin futures has been approved in 2021.
“The approval of a spot Bitcoin ETF in the United States is a monumental step forward for GBTC investors and everyone who realizes the cryptocurrency’s potential to transform our future. Today’s historic results are a testament to the unwavering patience and support of GBTC investors and the hard work and dedication of the entire Grayscale team and partners,” said Grayscale CEO Michael Sonnenshein in his press release.
“We are pleased to confirm that the Grayscale team has received the necessary regulatory approvals to list GBTC on NYSE Arca, and we will share a press release with additional information shortly.” ~ Grayscale Spokesperson
— Frank Chaparro (@fintechfrank) January 10, 2024
Fee competition to watch out for
With approval secured for the issuance of a Spot Bitcoin ETF, the impending focus shifts to trading. Industry experts expect trading to begin early Thursday morning, predicting significant upward momentum for the price of Bitcoin and other assets following this regulatory approval.
“Today, investors can already buy, sell or gain exposure to Bitcoin through several brokerage firms, mutual funds, domestic stock exchanges, peer-to-peer payment apps, non-compliant cryptocurrency trading platforms, etc. , through the Grayscale Bitcoin Trust,” SEC Chairman Gary Gensler wrote in his official statement.
BlackRock and Ark Investments have already cut fees for their upcoming Bitcoin exchange-traded fund (ETF). According to a recent S-1 filing, BlackRock has revised its fee structure, lowering it to 0.25% from the previous 0.30% for the first 12 months or until the fund accumulates $5 billion in assets.
Similarly, Ark Investments and 21Shares adjusted their fees to 0.21% from the previous 0.25%, and reduced their fees to 0.12% for the first $5 billion. Additionally, the company is waiving full fees for the first six months after the fund’s listing or until assets reach $1 billion, whichever comes first.
In fact, the race is on now. But unlike this emotional rollercoaster that many of us have been held hostage to for six months, especially the past two days, we’ll be tracking flow volume, new launches, etc. more generally. Now we are free. https://t.co/rY1xZF8YVe pic.twitter.com/6FtPnc4Mmg
— Eric Balchunas (@EricBalchunas) January 10, 2024
CBOE also announced that spot Bitcoin ETF trading will soon begin tomorrow. The exchange confirmed that six of the 11 pending ETFs are scheduled to begin trading on Thursday.
It specifically lists Invesco Galaxy Bitcoin ETF (BTCO), Franklin Bitcoin BTF (EZBC), ARK 21Shares Bitcoin ETF (ARKB), VanEck Bitcoin Trust (HODL), Fidelity Wise Origin Bitcoin Fund (FBTC), and WisdomTree Bitcoin Fund (BTCW). . . Notably, CBOE previously announced that SEC approval for these investment products was pending.
The first “accelerated request” (a request to release on the same day as everyone else, in this case 1/11, which the SEC told the issuer to file today) appears to have been removed. We expected to arrive at 4pm, but earlier would be fine (ARK is always first for this). pic.twitter.com/HEi6jB56qY
— Eric Balchunas (@EricBalchunas) January 10, 2024
These regulatory developments not only open up new avenues for investors, but also highlight the growing legitimacy and mainstream awareness of digital assets in the broader financial landscape.
“We today approved the listing and trading of certain spot Bitcoin ETP shares, but did not endorse or endorse Bitcoin. Investors should be cautious about the numerous risks associated with Bitcoin and products whose value is tied to cryptocurrencies,” added the SEC’s Gensler.
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About the author
Kumar is an experienced technology journalist specializing in the dynamic intersection of emerging fields including AI/ML, marketing technology, cryptocurrency, blockchain, and NFTs. With over three years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and providing comprehensive insights. Kumar’s specialty is producing high-impact content including articles, reports and research publications for prominent industry platforms. With a unique skill at combining technical knowledge and storytelling, Kumar excels at communicating complex technical concepts in a clear and engaging way to diverse audiences.
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Kumar is an experienced technology journalist specializing in the dynamic intersection of emerging fields including AI/ML, marketing technology, cryptocurrency, blockchain, and NFTs. With over three years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and providing comprehensive insights. Kumar’s specialty is producing high-impact content including articles, reports and research publications for prominent industry platforms. With a unique skill at combining technical knowledge and storytelling, Kumar excels at communicating complex technical concepts in a clear and engaging way to diverse audiences.