SEC grants fast-track approval for spot Bitcoin ETF
The United States Securities and Exchange Commission (SEC) has given its approval for the listing of multiple spot Bitcoin ETFs on registered national exchanges in the country. This comes after a ten-year search for these products. The ETFs will officially begin trading on the CBOE starting from 9 am on January 11, coinciding with the opening of the US stock market.
The SEC’s filing mentioned 11 issuers that have been granted permission to list Bitcoin exchange-traded funds. The filing was initially released on January 10, but briefly disappeared due to heavy traffic on the SEC’s website.
Various firms have expressed their readiness to commence trading as early as January 11. VanEck CEO Jan Van Eck confirmed this in an interview with CNBC, and other issuers have also indicated their ability to quickly start spot Bitcoin ETF operations.
Just before the approval was granted, BlackRock and ARK 21Shares submitted amended applications revealing even lower fees than previously mentioned. Currently, Bitwise offers the lowest fees at 0.2%, followed by ARK 21Shares, BlackRock, and Fidelity in that order. However, it is unlikely that these firms will change their fees now that the SEC has given the green light for spot Bitcoin ETFs.
The SEC’s acceptance of several bids for spot Bitcoin ETFs caused volatility and price fluctuations in the underlying asset, Bitcoin. At the time of writing, Bitcoin was trading below $46,000, representing a decrease of over 2%.
On January 9, Bitcoin also experienced price fluctuations following a tweet from the SEC’s X account, which falsely claimed an approval for a spot Bitcoin ETF. The tweet was later revealed to be the result of unknown hackers compromising the page. This news caused a 6% drop in Bitcoin’s price, resulting in over $230 million in losses for crypto positions.
SEC lawyers have confirmed that an internal investigation will be conducted to determine the cause of this “colossal error,” and the FBI is reportedly involved in the investigations.
With the approval of spot Bitcoin ETFs, the focus may now shift to the BTC halving event in April and the inflows into these traditional finance (TradFi) investment vehicles related to Bitcoin. While some Wall Street experts, like JP Morgan, anticipate gradual capital interest, crypto-native entities like Mike Novogratz’s Galaxy Digital expect significant price surges of up to 74%.
Bloomberg’s James Seyffart predicts that BTC markets could see inflows ranging from $10 billion to $15 billion in the first year, in contrast to claims of up to $100 billion. These flows could come from new exposure to Bitcoin as well as capital rotation from other vehicles such as Canadian ETFs, crypto mining operations, and futures-based products.
Matthew Sigel, head of VanEck’s digital asset research division, estimates that there will be $2 billion in inflows in the first week and $40 billion in assets under management in the first year. However, these numbers may vary depending on factors such as the upcoming 2024 US presidential elections and changes in government in other sovereign nations.
Attention may now turn to Ethereum (ETH), which has its own ETF frenzy and upcoming technological upgrades. Despite the fake Bitcoin ETF approval, Ethereum has shown resilience and has gained over 9% in the past 24 hours.
In conclusion, the approval of spot Bitcoin ETFs by the SEC marks a significant milestone in the cryptocurrency market, and it will be interesting to see how these ETFs perform and the impact they have on the overall market.
