Key Takeaways
- The SEC has approved the US's first regulated spot Bitcoin ETFs.
- This decision enables direct investment in Bitcoin through regulated ETFs, simplifying access for investors.
- The industry anticipates significant inflows into these ETFs, with estimates reaching up to $14 billion in the first year.
The US Securities and Exchange Commission (SEC) has given the green light to the country's first spot Bitcoin (BTC) exchange-traded funds (ETFs), a move hailed as a major milestone for the cryptocurrency market.
The SEC's nod to applications from a roster of firms, including ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton, marks a pivotal moment.
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This decision allows these spot Bitcoin ETFs to be listed and traded on their respective exchanges. This approval signifies a significant development, offering investors a regulated avenue to gain direct exposure to Bitcoin's price without the complexities of purchasing or self-custody of the cryptocurrency. Essentially, investors will buy shares in ETFs holding Bitcoin as their underlying asset.
Reflecting on the journey, it's noteworthy that the SEC had previously rejected all applications for spot Bitcoin ETFs, citing fears of market manipulation and fraud.
This stance was successfully challenged by Grayscale in a court ruling in August 2023, leading to the overturning of the SEC's denial of Grayscale's application to convert its Bitcoin Trust into a spot Bitcoin ETF.
The industry is now keenly anticipating the trading commencement of these ETFs. Estimates from Galaxy Research and VanEck suggest substantial inflows into these products, with projections of $14 billion in the first year and about $2.4 billion in the first quarter of 2024, respectively.
The process to launch a spot Bitcoin ETF in the US involves SEC approval of both the S-1 (or S-3) and 19b-4 forms submitted by issuers. On January 8th, just before the approval, ten issuers filed their final amended S-1 and S-3 filings, disclosing the fees they plan to charge.
The SEC's approval of these spot Bitcoin ETFs marks a new chapter in the US financial landscape, providing a regulated and potentially more accessible path for investors to tap into the Bitcoin market.
