Spot Bitcoin ETF Approved by SEC
The United States Securities and Exchange Commission US SEC approved the first spot, Bitcoin ETF, which will bring more accessible access to the world’s biggest cryptocurrency. The positive news was highly anticipated by crypto fans who can now invest in Exchange-Traded Funds, which was a decade in the making.
The Bitcoin ETF is the spiritual reversal of Executive Order 6102, according to Twitter user Balaji. Back in 1935, they seized the gold, but now, digital gold is back. He added that ninety years ago, FDR and his fellow travelers rode the 20th-century arc of centralization, allowing them to gain control over the population and seize the gold after a series of epic legal battles.
The US SEC confirms the approval of 11 Spot ETF applications, including from BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck. The approval was carried through despite some warnings from prominent officials, and investor advocates that the products carried risks. Despite warnings from some officials and investor advocates that the products took risks.
After the Bitcoin ETF approval, most products are expected to begin trading on Thursday, offering investors exposure to the most popular cryptocurrency without directly holding its assets. The approval also significantly boosts the crypto industry, mired in various scandals in the past few years.
One of the world’s leading asset managers and America’s multinational investment company, BlackRock, will the opening bell at Nasdaq to promote its iShares Bitcoin Trust. The approval comes after months of anticipation and fierce legal battle. Some earlier controversies involved the approval as hackers briefly seized control of the SEC’s account on Twitter (X) and falsely claimed that the applications had already been approved.
The earlier false announcement on social media prompted some sharp swings in Bitcoin’s price, but after the approval, Bitcoin was trading at about $45,000. But as of posting time, Bitcoin is trading at $46,283 based on the latest Coingecko charts.
Analysts Share Thoughts on Bitcoin ETF
Analysts from Standard Chartered claimed earlier this week that Bitcoin ETF could draw $50 billion to $100 billion this year alone. In contrast, other firm’s analysts have said inflows will be closer to $55 billion over five years. As of December 2022, the total net assets of United States ETFs stood at $6.5 trillion, according to the Investment Company Institute.
Some of the Bitcoin ETF issuers slashed their proposed fees in new filings, which include BlackRock and Ark/21Shares. Analysts anticipated that success in the battle for inflows will mostly depend on the fees and liquidity.
Fees range from $0.2% to 1.5%, with many firms offering to waive fees entirely for a certain period. Meanwhile, speculators’ liquidity could be more important for short-term participants as they want to buy in or out of the products.
Grayscale CEO Michael Sonnenshein stated that he believed that Bitcoin could change the world, and his company remains excited at the prospect of democratizing access to this asset. New York Stock Exchange head of traded products Douglas Yones noted that the approval was also a milestone for the ETF industry.
Bitcoin ETF as a Game Changer for Crypto Industry
The approval of Bitcoin ETF is a game changer to the crypto industry after trying for more than a decade to launch such a product, according to some financial analysts from different international firms. For the crypto industry, it is a big win, boosting the legitimacy of the cryptocurrency industry and pushing Bitcoin further into the mainstream.
The crypto industry can claim victory in a particular battle amid a broader tug-of-war between the industry and the Securities and Exchange Commission, which has been cracking down on the sector for the past few months.
Bitcoin ETF is different from buying Bitcoin outright as it allows investors to gain exposure to the price of Bitcoin without the complications and risks of owning the crypto directly.
How Bitcoin ETF Works
Bitcoin ETF will be listed on the Nasdaq, NYSE, and the CBOE US Equities Exchanges. Their assets will comprise physical bitcoin purchased from crypto exchanges and held via custodians like Coinbase Global (COIN.O). The products track a Bitcoin benchmark, while some track an index provided by CF Benchmarks, a subsidiary of Kraken, which aggregates data from Bitcoin-USD markets operated by crypto exchanges.
To address the SEC’s manipulation concerns, Nasdaq and CBOE have created a market surveillance mechanism with Coinbase, the largest U.S. cryptocurrency exchange.
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This is a welcome and positive development for the entire crypto industry worldwide, starting from the US and it will be reverberated to different parts of the world.
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