Late on Wednesday evening, US authorities gave the green light to trading in special Bitcoin ETFs. picture alliance / ZUMAPRESS.com | Paulo Lopes
The US Securities and Exchange Commission approved the first Bitcoin ETFs for trading in the United States late on Wednesday.
The approval has been years in the making and offers investors an easy way to gain exposure to the cryptocurrency.
After the ETFs were approved, the Bitcoin price initially fell by one percent to $45,620.
The Securities and Exchange Commission (SEC) approved the first Bitcoin ETFs for trading in the US late on Wednesday after a years-long lead-up. The US Securities and Exchange Commission approved eleven applications for Bitcoin spot ETFs from various issuers, including Fidelity, BlackRock and VanEck, according to one document on their website emerges.
The approval of the Bitcoin ETFs by the SEC was carried out in an accelerated procedure and trading in the ETFs will begin this Thursday, the supervisory authority continued. After the SEC approved the exchange-traded funds, the Bitcoin price initially fell by one percent to $45,620.
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Grayscale’s Bitcoin ETF application was one of 11 spot Bitcoin ETFs approved, according to a statement from the investment firm to TheBlock. “I am pleased to confirm that the Grayscale team has received the necessary regulatory approvals to list GBTC on the NYSE Arca and we will issue a press release with further information shortly,” said the Grayscale spokesperson.
Grayscale’s successful lawsuit against the SEC helped kick-start the approval process for spot Bitcoin ETFs. A court ruling last year essentially forced the current decision.
US Securities and Exchange Commission remains skeptical about Bitcoin
SEC chief Gary Gensler remained skeptical of Bitcoin, saying in a statement that it is “primarily a speculative, volatile asset that is also used for illegal activities such as ransomware, money laundering, sanctions evasion and terrorist financing.”
He also said: “While we approved the listing and trading of certain spot Bitcoin ETP shares today, we have neither approved nor endorsed Bitcoin. Investors should continue to exercise caution given the myriad risks associated with Bitcoin and products whose value is tied to cryptocurrencies.”
The Spot Bitcoin ETFs are similar to the Spot Gold ETFs in that they hold Bitcoin as the fund’s underlying asset, unlike the Bitcoin Futures ETFs, which are already approved for trading and hold futures contracts tied to Bitcoin.
Analysts expect increasing demand from Bitcoin ETFs
Analysts expect the spot Bitcoin ETFs to boost demand for Bitcoin as investors and even financial advisors can now easily put money into the cryptocurrency, which has a total market value of more than $900 billion.
This is because they no longer have to go through the hassle of opening an account with a crypto custodian, purchasing the cryptocurrency directly, and dealing with different types of storage options for the asset. Instead, a spot Bitcoin ETF would allow a large number of investors to gain exposure to the cryptocurrency from the convenience of their already established brokerage account.
The issuance of Bitcoin exchange-traded funds by Wall Street giants is also expected to give the asset class more credibility among traditional investors, as well-known traditional asset management firms are launching Bitcoin exchange-traded funds.
The booming demand could also drive up the price of Bitcoin. Standard Chartered said Bitcoin ETFs could drive the price to $200,000 by the end of 2025, while Fundstrat’s Tom Lee said Bitcoin could reach as much as $150,000 in the next twelve months.
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“If ETF-related inflows occur as we expect, we believe levels near $200,000 in late 2025 are possible. This assumes that between 437,000 and 1.32 million new bitcoins will be held in U.S. spot ETFs by the end of 2024,” Standard Chartered said in a note on Monday, adding that inflows into the ETFs were in their first year of existence could be between 50 and 100 billion US dollars.
Anticipation for a Bitcoin ETF has increased in recent weeks as various applicants offer more details about the fees they will charge if their funds are approved.
The approval of the spot Bitcoin ETFs came after the SEC’s X social media account was “compromised” and posted an unauthorized message late Tuesday saying the Bitcoin ETFs had already been approved. Gensler was quick to post a rebuttal on his X account to explain that it was an unauthorized post and that the ETFs had not yet been released.
This article has been translated from English. You can find the original here.