For over a decade, the asset management industry has sought to introduce a spot bitcoin ETF, with the goal of attracting a more diverse range of investors to the realm of cryptocurrencies.
In a noteworthy development, U.S. regulators have granted approval for bitcoin ETFs, representing a significant expansion of accessibility to the 15-year-old digital currency. The Securities and Exchange Commission (SEC) declared the effective approval of crucial filings from various markets seeking to list these innovative products, and trading is scheduled to commence on Thursday.
Prominent entities like BlackRock, Fidelity, and Grayscale have actively pursued the establishment of bitcoin ETFs, with recent announcements indicating adjustments to fees—a sign of an anticipated intense competition for investors’ capital. These spot ETFs directly hold physical bitcoin, differing from the previously sanctioned bitcoin futures ETFs that involve derivative contracts linked to BTC.
Grayscale $GBTC 1.5%
Hashdex $DEFI 0.9%
Valkyrie $BRRR 0.49%
Invesco $BTCO 0.39%
Wisdom Tree $BTCW 0.3%
Franklin $EZBC 0.29%
Blackrock $IBIT 0.25%
Fidelity $FBTC 0.25%
Vaneck $HODL 0.25%
Ark 21 $ARKB 0.21%
Bitwise $BITB 0.2%
— OnlyOptionsTrades (@OnlyOTrades) January 10, 2024
The SEC’s approval comes after years of delays and rejections in attempts to launch spot bitcoin ETFs. Importantly, this decision follows a significant legal setback for the SEC in August when the D.C. Circuit Court of Appeals ruled the rejection of Grayscale’s attempt to convert its Grayscale Bitcoin Trust into a spot ETF as “arbitrary and capricious.”
SEC Chair Gary Gensler referenced this court defeat as a factor influencing the agency’s decision to approve the numerous filings on Wednesday. Advocates contend that a regulated spot bitcoin ETF offers a way for institutional and retail clients to participate in bitcoin’s price movements without the necessity for direct investment or setting up a digital wallet.
SEC Commissioner Hester Peirce, a supporter of the digital asset industry, expressed contentment with the approval, underscoring the right of American investors to engage with spot bitcoin ETFs. However, Commissioner Caroline Crenshaw dissented, citing concerns about the safety of the bitcoin spot market in terms of fraud or manipulation.
The anticipation for SEC approval reached its peak in 2023, culminating in meetings between the agency and proposed ETF issuers, coupled with amendments to ETF S-1 filings. Major exchanges like NYSE Arca, Cboe BZX, and Nasdaq submitted final documents, aligning with revised S-1 filings. Brokerages such as Fidelity and E-Trade started incorporating ETF tickers on their platforms.
Amid the optimistic outlook for spot ETFs, the price of bitcoin surged from approximately $27,000 in October 2023 to surpassing $45,000 at the start of 2024. Grayscale and Hashdex celebrated the regulatory approvals, marking a monumental day in the history of digital assets.
The first day of Bitcoin ETF trading will start Thursday, January 11th.