SEC Approves Spot Bitcoin ETF Applications. What to Expect from This Decision?
Jan 11, 2023
The United States Securities and Exchange Commission (SEC) has officially approved the launch of several exchange-traded funds (ETFs) that will track the price of Bitcoin.
The approval marks a historic milestone for the crypto world, with this being the first time that such products have been given the green light by regulators in the US.
Among those given the go-ahead for their spot Bitcoin ETF proposals were 11 issuers:
- Blackrock’s iShares Bitcoin Trust (IBIT)
- ARK 21Shares Bitcoin ETF (ARKB)
- WisdomTree Bitcoin Fund (BTCW)
- Invesco Galaxy Bitcoin ETF (BTCO)
- Bitwise Bitcoin ETF (BITB)
- VanEck Bitcoin Trust (HODL)
- Franklin Bitcoin ETF (EZBC)
- Fidelity Wise Origin Bitcoin Trust (FBTC)
- Valkyrie Bitcoin Fund (BRRR)
- Grayscale Bitcoin Trust (GBTC)
- Hashdex Bitcoin ETF (DEFI)
Following the final registration statements going into effect, these ETFs will be available for trading on Thursday, 9 a.m. ET. Analysts believe the launch will bring in billions of dollars in investments, with projections ranging from significant to record-setting.
Experts make optimistic predictions that the first 24-48 hours of trading will be crucial, as all eyes will be on the inflows and potential market impact. Anthony Rousseau, head of brokerage solutions at multi-asset trading platform TradeStation, cautions against underestimating the long-term effects on the crypto industry.
According to Rousseau, over $100 trillion in assets are managed by financial institutions, some of which could be invested in Bitcoin. However, the integration of BTC into their investment strategies may be a time-consuming process, involving navigating regulatory obstacles and adhering to due diligence.
Coinbase, one of the world’s leading cryptocurrency exchanges, also expressed enthusiasm about the news in a blog post. They stated that the approval of these ETFs is a “watershed moment for the expansion of the crypto economy,” which will attract new investors and boost innovation for years to come.
The news of the approval has caused a surge in Bitcoin’s price, with it reaching a $47,647 mark before dipping to $45,700 as short-term traders took profits. As of the time of writing, Bitcoin is currently trading at $47,133, up 5% in the last 24 hours.
Are Spot Ether ETFs on the Horizon?
In light of this significant development, some experts believe that a spot ether ETF could be the next product to receive approval from the SEC, while others speculate on potential changes in the regulatory landscape for digital assets. Big-name firms, such as Fidelity and BlackRock, have already applied for a spot ether ETF over the last few months.
Additionally, a ruling in a D.C. court in the summer has added to the excitement for a potential spot ether ETF. The judges ruled that the SEC must reconsider Grayscale’s bid for a spot Bitcoin ETF, which came after the company’s lawsuit against the agency last year following the denial of their proposal to convert their flagship GBTC fund.
According to some experts, this ruling could make it difficult for the SEC to reject spot ether ETFs in the future without exposing themselves to another lawsuit. This, combined with the approval of spot Bitcoin ETFs, shows that the agency may be shifting its stance on cryptocurrencies.
The price of Ethereum has surged by 11.28% on these reports in just 24 hours, reaching $2,642 at the time of writing.
Gary Gensler’s Comments
Despite the approval, SEC Chairman Gary Gensler made it clear that the commission does not endorse or approve Bitcoin itself. In a statement released shortly after the approvals were announced, he emphasised the risks associated with investing in cryptocurrency and cautioned investors to remain vigilant.
Gensler stressed that the decision should not be seen as an indication of the SEC’s stance on other cryptocurrencies and their compliance with federal securities laws. According to Gensler, the majority of cryptocurrencies are considered securities and, therefore, fall under the SEC’s jurisdiction.