SEC Approves Spot Bitcoin ETFs
The wait is finally over as the SEC has approved 11 spot Bitcoin exchange-traded funds. Gensler says it’s not an endorsement of Bitcoin, but no one is paying attention to that.
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The Securities and Exchange Commission has finally approved Spot Bitcoin ETF in a milestone decision that could boost crypto adoption. The decision was widely expected with a 95% odds of approval from ETF experts. Despite the approval, BTC only saw slight gains, and the document has been removed from the SEC website.
According to the information initially available on the SEC website on January 10, all 11 applications were approved. This means BlackRock, Grayscale, Ark 21 Shares, Bitwise, Hashdex, Fidelity, Invesco Galaxy, VanEck, and Valkyrie can all start trading their ETFs as soon as Thursday. Six approved ETFs will trade on the Chicago Board Options Exchange (CBOE), three on the New York Stock Exchange (NYSE), and the other two on the Nasdaq.
The approval represents a landmark decision for Bitcoin and the entire crypto industry. It marks the end of the long fight for approval for spot Bitcoin ETF. It could also boost mainstream adoption for Bitcoin as spot ETFs will allow investors to own the asset indirectly.
Meanwhile, SEC Chair Gary Gensler has confirmed it but added the approval of the ETFs does not represent an endorsement of Bitcoin. However, SEC Commissioner Hester Pierce criticized the lateness, noting that it was unnecessary and inconsequential.
Nevertheless, Bitcoin is only up about 1% following the news. Experts believe the price reaction is because ETF approval was priced in three months ago and the fake news of yesterday's approval likely affected today's performance.
Trading Starts on Thursday
With the approval, trading is expected to start by Thursday. This is when issuers will start the fight to see who can attract the most inflows. Firms are already involved in a proxy war over fees, with several further cutting their fees in reaction to competition.
According to their final filings, BlackRock, which initially set its fees at 0.30% cut it to 0.25% while keeping it at 0.12% for the first $5 billion. Ark Invest also reduced its fees to 0.21%, while Bitwise went as low as 0.20%.
The fee wars between the issuers have led to speculations that the firms could later increase fees after trading starts. However, Bloomberg ETF expert Eric Balchunas noted that this is highly unlikely.
SEC X Account Mute
The SEC official account on X has not posted news of the approval. This is likely becagsf of the hack on January 9 when the hacker posted fake news about the approval of the spot Bitcoin ETF. The posts were later deleted, with the SEC disclosing that its account was hacked in a SIM swap attack.
However, it had a major effect on price with Bitcoin reaching as high as $47,680 before dropping as low as $45,400. This caused about $100 million in liquidations.
The incident also highlighted how poorly secured the SEC account was. According to the report, the SEC account did not have two-factor authentication, and this was what made it easy to hack. Criticism flooded in after the incident, with many questioning how the SEC can protect consumers if it cannot protect its social media account.
