In an exciting development, 11 spot bitcoin ETFs have gained approval from the US Securities and Exchange Commission (SEC) and are set to commence trading this Thursday.
Now, investors can eagerly anticipate participating in this new investment opportunity.
The approved ETFs with their proposed ticker symbols are ready for market entry.
Seeking to attract investors, numerous issuers proactively reduced and provided fee waivers for their spot bitcoin ETFs in anticipation of the SEC’s approval.
The Prolonged Journey of Spot Bitcoin ETF Approval
This approval of a spot bitcoin ETF in the United States has been a lengthy process. The journey commenced in 2013 when an entity linked to the Winklevoss twins submitted the initial application for this financial product to the SEC.
Since then, the road to approval has been marked by persistence and anticipation.
Although the initial application was rejected, the SEC started approving bitcoin ETFs based on futures products from 2021 onward.
Rejection Sparks Legal Action
Numerous spot-based bitcoin ETF applications faced rejection, citing concerns about the unregulated nature of bitcoin posing significant risks for investors.
In response, crypto asset manager Grayscale took legal action, suing the SEC to compel clearer guidelines on the matter.
Yet, the landscape shifted when BlackRock submitted an application for a spot Bitcoin product in June of the previous year. This move gained traction for the concept, especially as other financial heavyweights like Fidelity and Franklin Templeton joined in.
Their participation was viewed as a signal that regulatory approval was imminent, given their significant roles in the US financial system.
During the back-and-forth between regulators and issuers to finalize details, last-minute glitches arose.
A post on social media platform X, purportedly from the SEC’s account, declared the approval on Tuesday, causing bitcoin prices to surge beyond $48,000.
However, the regulator swiftly clarified that its X account had been compromised, putting an end to the initial confusion.
Boost for Crypto with Cautionary Tone from Chair Gensler
The SEC’s approval acts as a noteworthy regulatory endorsement for the world’s largest crypto asset, potentially alleviating some investor concerns about entering the space.
This introduces additional regulatory safeguards and enables investors to engage with established financial firms. However, SEC Chair Gensler cautioned investors to carefully weigh the risks before committing their funds to the product.
Gensler stated in a cautionary statement,
“In approving the listing and trading of specific spot bitcoin ETP shares today, we want to clarify that we did not endorse or approve bitcoin itself.”
He emphasized the need for investors to exercise caution due to the numerous risks associated with Bitcoin and products linked to crypto.
Market Growth Projections for Spot Bitcoin ETFs
Previously, retail investors accessed cryptocurrency exposure by purchasing coins directly or through ETFs dealing in cryptocurrency futures.
The advent of a spot bitcoin ETF now provides an avenue for investors, particularly retail ones, to participate in bitcoin without the necessity of managing their investment through a bitcoin wallet.
Instead, they can conveniently hold the ETFs within their brokerage accounts.
Anticipated by analysts, a substantial influx of funds into bitcoin spot ETFs is expected, contributing to the notable surge in bitcoin prices observed in recent months.
This optimistic outlook reflects the growing influence of these ETFs on the cryptocurrency market.
Bloomberg Intelligence estimates suggest that the spot bitcoin ETF market has the potential to expand to $100 billion over time.
Financial services provider Galaxy forecasts a significant increase in inflows, projecting growth from $14 billion in the first year to a substantial $39 billion within three years for spot bitcoin ETF products.
List of Approved Spot Bitcoin ETFs
- ARK 21Shares Bitcoin ETF (ARKB)
- Blackrock’s iShares Bitcoin Trust (IBIT)
- 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)