SEC Officially Gives Green Light to Bitcoin Spot ETFs

Finally, after much anticipation, on January 11 (Vietnam time), the U.S. Securities and Exchange Commission (SEC) officially approved the launch of 11 Bitcoin spot exchange-traded funds (ETFs) from major Wall Street players, including Ark Invest, BlackRock, Bitwise, VanEck, WisdomTree, Invesco & Galaxy, Fidelity, and Valkyrie.

SEC Officially Gives Green Light to Bitcoin Spot ETFs. Image: Decrypt

As predicted by many earlier, the SEC has responded to all spot ETF applications without waiting for each proposal's review deadline.

In its official announcement, SEC Chairman Gary Gensler stated that despite approving Bitcoin spot ETFs, the commission remains neutral and does not directly endorse cryptocurrencies. Additionally, only Bitcoin is permitted as an ETF asset, with the SEC still considering many cryptocurrencies as securities. Gensler and the SEC have recently posted several warnings to investors before investing in the crypto space.

The news of SEC approving Bitcoin ETFs had been hinted at by multiple sources the previous night, indicating that all preparations were in place for the listing and trading of the 11 Bitcoin spot ETFs on stock exchanges. Cboe has publicly announced approval for Bitcoin ETFs from Ark Invest, Invesco, VanEck, Franklin, WisdomTree, and Fidelity, with trading set to begin today (11/01).

Immediately after, the community also discovered the ticker symbols for Ark Invest, WisdomTree, Invesco, Franklin, and Hashdex Bitcoin spot ETFs on Fidelity's trading app, even allowing users to place limit orders pending SEC approval.

The ticker HOLD representing VanEck's fund product was also found on Etrade. Furthermore, all 11 exchange-traded funds (ETFs) Bitcoin spot from major Wall Street players have been "shelved" on Bloomberg Terminal under "Pending Listing."

Overall, these organizations have chosen Coinbase as the custodian partner for Bitcoin collateral for their ETFs. Following Ark Invest, the initial deadline for SEC announcements for the remaining ETFs is mid-March 2024.

Bitcoin has shown strong growth in recent months, bolstered by investor optimism about the possibility of the world's first Bitcoin spot ETF. Consequently, the listing of this new product opens up opportunities for investors to access digital assets through traditional stock exchanges, potentially attracting a large influx of new capital and ushering the crypto market into a new growth cycle.

However, at the time of the announcement, BTC did not show much volatility, fluctuating only within the $45,000 - $46,000 range.

1D chart of BTC/USDT pair on Binance at 03:45 AM on 11/01/2024

Recent market developments have been sufficient to prove that Bitcoin ETFs are a milestone for this asset. From the sell-off following Matrixport's unsubstantiated remarks on January 3, to Bitcoin's response to the SEC's "duck tweet" from Account X on January 10.

Despite previously approving ETF futures, the SEC has maintained a hostile stance towards spot ETFs. Since 2013, the U.S. Securities and Exchange Commission has rejected numerous spot ETF applications, citing concerns about market manipulation and fraud, which do not guarantee investor safety as traditional channels do.

However, now the agency has little reason to continue rejecting them, especially after Grayscale gained an advantage over the SEC in the August 2023 trial. Nonetheless, Chairman Gary Gensler has recently issued two warnings about the risks of crypto investments on Account X.

Some members of the cryptocurrency community also pointed out that the SEC's approval of Bitcoin ETFs and these products' trading on U.S. stock exchanges coincided exactly 15 years after Hal Finney's iconic "running bitcoin" Twitter post—the first person to publicly use Bitcoin after Satoshi Nakamoto, the founder.