The SEC has finally approved the first regulated spot Bitcoin exchange-traded fund
The US Securities and Exchange Commission (SEC) has approved the first regulated spot Bitcoin exchange-traded fund in the country, just a day after a fake announcement posted on the SEC’s official Twitter page caused mayhem on the markets.
On January 10, the SEC endorsed the 19b-4 applications from Fidelity, BlackRock, Valkyrie, Grayscale, Bitwise, ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Hashdex and Franklin Templeton, allowing for a spot Bitcoin ETF to be listed and traded on the separate exchanges. The document was available for download on the SEC’s official website for several minutes but was replaced by a different link after an ‘Error 404’ message was reported.
The landmark approval will allow the country’s first regulated exchange-traded product to give investors direct access to Bitcoin prices without needing to buy it or having concerns regarding self-custody. Investors will purchase ETF shares that have Bitcoin as their underlying asset.
The SEC had invariably denied all previous spot Bitcoin ETF applications since the first was requested by Cameron and Tyler Winklevoss to launch the Winklevoss Bitcoin Trust in 2013, with worries of potential fraud and market manipulation.
However, the regulator was pushed to reevaluate its position after Grayscale won an August 2023 court case, overturning the SEC’s rejection of its application to transform its Grayscale Bitcoin Trust into a spot Bitcoin ETF.
With the approval of spot Bitcoin ETFs, the crypto industry will closely observe the start of ETF trading. Alex Thorn, head of digital at Galaxy Research, estimates that spot Bitcoin ETF influxes in the first year could approach $14 billion. At the same time, global fund manager VanEck calculates that approximately $2.4 billion would stream into spot Bitcoin products in 2024’s first quarter.
