SEC Approves First Spot Bitcoin ETFs: A Historic Milestone for the Crypto Industry

• The SEC has given the green light to 11 issuers to launch spot Bitcoin ETFs, which will allow investors to access the cryptocurrency without buying or storing it directly.

• The SEC’s website crashed shortly after the announcement, causing confusion and speculation among the crypto community.

The U.S. Securities and Exchange Commission (SEC) has finally approved the first spot Bitcoin exchange-traded funds (ETFs) in the country, marking a historic milestone for the crypto industry. Spot Bitcoin ETFs are funds that hold Bitcoin as their underlying asset, unlike futures-based ETFs that track the price of Bitcoin through derivatives contracts.

The SEC’s approval came on Jan. 10, just one day after a false announcement posted from its official Twitter account wreaked havoc on the markets. The fake tweet claimed that the board had approved the first spot Bitcoin ETF, but it was later deleted and the account was suspended.

The SEC’s official website also experienced technical difficulties shortly after the real approval was announced, showing an ‘Error 404’ message when users tried to access the approval document. The document was later restored under a different link, but not before causing confusion and speculation among the crypto community.

The approval followed more than 10 years of attempts by various issuers to launch a spot Bitcoin ETF in the U.S. The SEC had consistently denied all previous requests, citing concerns over potential market manipulation and fraud in the Bitcoin spot market.

However, the SEC was forced to revisit its position after Grayscale, the largest crypto asset manager, won a court case in August 2023 that overturned the SEC’s denial of its application to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF. The court ruled that the SEC’s decision was “arbitrary and capricious” and that the board had failed to explain its reasoning adequately.

Sec Approval to BTC ETF: A New Wave of Investment Opportunities

The SEC’s approval of spot Bitcoin ETFs opens up a new wave of investment opportunities for both institutional and retail investors who want to gain exposure to the cryptocurrency without having to buy or store it directly. Spot Bitcoin ETFs are expected to offer lower fees, higher liquidity, and better tax efficiency than other existing products such as trusts or funds.

The Board has approved 11 issuers to launch spot Bitcoin ETFs, namely ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton. These issuers will list and trade their ETFs on various exchanges, such as NYSE Arca, Nasdaq, and Cboe BZX.

The industry will now closely watch when the ETFs begin trading and how they will impact the price and adoption of Bitcoin. Some analysts have estimated that spot Bitcoin ETF inflows could reach billions of dollars in the first year, while others have cautioned that the ETFs could also increase the volatility and regulatory scrutiny of the crypto market.

The fees charged by the issuers will also vary, ranging from 0.2% to 1.5%. Notably, ARK 21Shares will waive all fees for the first six months or until the product reaches $1 billion in assets under management (AUM).

The approval of spot Bitcoin ETFs in the U.S. is a significant achievement for the crypto industry, as it reflects the growing recognition and acceptance of Bitcoin as a legitimate asset class. It also sets a precedent for other countries that may follow suit and approve their own spot Bitcoin ETFs in the future.