In a groundbreaking decision, the Securities and Exchange Commission (SEC) has granted approval for the creation and trading of spot bitcoin exchange-traded funds (ETFs). This landmark move is anticipated to attract billions of dollars, introducing a new wave of investors to the dynamic world of cryptocurrency.
The SEC's order, which surfaced before 4 p.m. today, briefly vanished from the agency's website, underscoring recent tech glitches that sparked a false tweet about the spot bitcoin ETF approval. Hashdex, among the 11 approved firms, confirmed the news, signaling a significant step forward for the industry.
Among the approved issuers are industry giants such as Grayscale Bitcoin Investment, BlackRock Inc., Fidelity Investments, Invesco Ltd., and Ark/21Shares. Trading for these funds, as outlined in the SEC filing, is expected to commence as early as Thursday.
"After careful review, the Commission finds that the Proposals are consistent with the Exchange Act and rules and regulations," stated the SEC, acknowledging the evolution of security measures implemented by applicants to address previous concerns.
The crypto community and investors celebrated the SEC's decision, marking a pivotal moment more than a decade after the Winkelvoss twins' initial 2013 application. Previous denials were based on concerns about fraud protection, but recent security enhancements seem to have allayed the regulator's fears.
Sui Chung, CEO of CF Benchmarks, remarked, "Spot ETF approval today is a true milestone moment for the crypto asset class," emphasizing the potential to open up bitcoin to a broader investor base.
The approved funds include Bitwise Bitcoin ETF, Hashdex Bitcoin ETF, Valkyrie Bitcoin Fund, Invesco Galaxy Bitcoin ETF, VanEck Bitcoin Trust, and the WisdomTree Bitcoin Fund. Despite the news, Bitcoin experienced a minor dip of less than 1%, still maintaining substantial growth over the past year.
While cryptocurrency futures ETFs launched in 2021, the SEC hesitated on approving a spot bitcoin ETF until now. A pivotal court decision in August, where Grayscale Investments prevailed against the SEC, was seen as a turning point.
In anticipation of market competition, issuers engaged in a fee war, with fees ranging from 0.20% to 1.5%. Some, including BlackRock, Invesco, and Bitwise, are waiving fees during the initial trading months.
Analysts predict significant inflows of $2 to $4 billion into the ETFs during their first trading days. However, issuers emphasize a long-term perspective, aiming to attract institutional investors and financial advisors to embrace bitcoin.
As competition intensifies, issuers focus on building relationships with financial advisors and institutional investors. Morningstar ETF analyst Bryan Armour noted, "It's this self-fulfilling prophecy where if you're the one that gathers the most assets, then you're going to get the most attention."
In conclusion, the approval of spot bitcoin ETFs marks a historic achievement for an industry that has dedicated a decade to this milestone. As ETFs hit the market, the landscape is set for increased adoption, with attention turning to building lasting relationships in the evolving crypto community.
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