The Securities and Exchange Commission (SEC) has made history by granting official approval for numerous spot Bitcoin ETFs, marking a pivotal moment for both the fund and cryptocurrency industries.
In a significant move, the SEC gave the green light to proposals from major players such as BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Valkyrie, Invesco, WisdomTree, Franklin Templeton, and Hashdex. Additionally, approvals were granted to Ark Invest and 21Shares, as revealed in a filing on Wednesday.
Interestingly, the SEC’s official announcement followed an “unauthorized tweet” from the SEC’s X account a day earlier, prematurely indicating approval. SEC Chair Gary Gensler clarified the situation and confirmed the approvals on Wednesday.
As of the SEC’s announcement, Bitcoin’s price is trading around $45,800, highlighting the market’s anticipation and response to the approval.
Bitcoin ETFs: A Cautious Embrace
Chair Gary Gensler emphasized the SEC’s approval of listing and trading for specific spot Bitcoin ETP shares but clarified that it does not constitute an endorsement of Bitcoin itself. Gensler urged investors to exercise caution due to the inherent risks associated with cryptocurrency and related products.
Industry Reacts to the Landmark Decision
Grayscale, a key player in the crypto investment space, confirmed the regulatory approvals required to list its Bitcoin Trust (GBTC) on NYSE Arca. Hashdex’s Chief Investment Officer, Samir Kerbage, celebrated the occasion, calling it “a monumental day in the history of digital assets.”
Despite the SEC’s historical reluctance, analysts from Bloomberg Intelligence had given a 90% chance of approval in recent months. This shift was attributed to constructive dialogue between the SEC and fund issuers.
Ark Invest and 21Shares renewed efforts in April to introduce a spot Bitcoin ETF, followed by BlackRock’s filing in June. The industry witnessed a wave of similar filings from various issuers.
Impact on Market Dynamics
The SEC’s approval aligns with the January 10 deadline for ruling on the ARK 21Shares Bitcoin ETF. Analysts and Ark Invest CEO Cathie Wood had anticipated approval for more than one ETF proposal by the deadline.
Notably, the approval comes after Grayscale Investments secured a court victory over the SEC in August, adding pressure on the regulator. Galaxy Digital CEO Mike Novogratz had earlier highlighted that a spot Bitcoin ETF could usher institutions into the crypto space.
Eagerly Awaited by Financial Advisers
A survey by Bitwise and VettaFi indicated that 88% of financial advisers interested in buying Bitcoin were awaiting the launch of a spot Bitcoin ETF. This underscores the significant impact such approval can have on the broader market.
Before the SEC’s decision, a fee war unfolded among potential issuers, with firms like Bitwise, BlackRock, Ark Invest, and Fidelity adjusting their planned fund fees below 0.30%. Industry observers noted that this reflected the imminent competition for assets.
What’s Next for Crypto?
The SEC’s approval of spot Bitcoin ETFs signifies a paradigm shift in the cryptocurrency landscape. As institutions eagerly eye the crypto space and investors await the potential benefits, the coming months will likely witness increased market activity. Will this pave the way for broader institutional involvement? Share your thoughts in the comments below!