- After 10 years of waiting, the SEC has finally approved the listing and trading of first-spot Bitcoin ETFs on US exchanges
- The regulator has green-lit 11 ETFs tracking the price of Bitcoin, from BlackRock, Fidelity, ARK Invest, Grayscale, and others
- Bitcoin rose slightly to hit $46,671 before dropping down to $45,800, while Ether is enjoying its highest valuation since May 2022
- The Cboe BZX exchange is set to commence trading six of the spot Bitcoin ETFs starting January 11
In what will be regarded as a major milestone in the history of Bitcoin and the broader cryptocurrency market, the Securities and Exchange Commission (SEC) has finally approved the first US-listed exchange-traded funds tracking Bitcoin (BTC), after a decade of waiting.
SEC Approves First Batch Of Spot Bitcoin ETFs For Trading On US Exchanges
On January 10, the securities watchdog uploaded a document to its website that said proposals for 11 spot Bitcoin ETFs were approved “on an accelerated basis”. This includes filings by BlackRock, Grayscale, Fidelity, ARK Invest and 21Shares, Franklin Templeton, Invesco and Galaxy, VanEck, Bitwise, WisdomTree, Valkyrie, and Hashdex.
The document stated that “after careful review”, the Commission found the proposals to be “consistent with the Exchange Act and rules and regulations thereunder applicable to a national securities exchange”.
Interestingly, the document noted that illicit activities such as fraud or market manipulation that would normally affect prices in the spot Bitcoin market would also impact the price of Bitcoin futures.
This was a nod to last year’s ruling by the DC Circuit Appeals Court that found the regulator to have acted “arbitrary and capricious” when rejecting crypto asset manager Grayscale’s bid to convert its GBTC Bitcoin trust fund into a spot ETF.
In a separate statement, SEC chairman Gary Gensler said that while his agency did approve the listing and trading of certain spot Bitcoin ETP shares, they did not approve or endorse the world’s most valuable cryptocurrency. He also asked investors to be cautious about the “myriad of risks” associated with Bitcoin and products “whose value is tied to crypto”.
Bitcoin Wavers But Ether Surges As Speculation About Ethereum Spot ETF Heats Up
However, the biggest and one of the most coveted developments of the year for Bitcoin failed to materialize in the market. Following the SEC’s decision, the leading cryptocurrency only moved slightly to get past the $45,500 mark. Experts had already warned that the ETF approval could result in Bitcoin suffering a price correction due to a potential “sell-the-news” event.
Sell the news can be described as a scenario where an asset’s price, leverage, and market sentiment rise in the lead-up to a bullish event, only to tumble shortly after as investors rush to liquidate their positions to rake in maximum profits.
Bitcoin has, however, trimmed its losses from the previous day when a fraudulent ETF approval post made by the SEC’s X account resulted in the token rallying to nearly $48,000 before crashing down to the $45,000 range once the agency rectified its mistake. As per data from Coin Metrics, BTC reached $46,671 following the real announcement.
Chris Martin, the head of research at digital asset data and market intelligence firm Amberdata, highlighted that trading volumes across almost every exchange have been on the rise in the last 24 hours and that it wouldn’t be surprising to see the metric “continue to explode throughout the rest of the week”.
While Bitcoin’s rally was slow, the stocks of mining companies, which greatly benefit from increases in BTC rates and tend to reflect a longer-term investment sentiment toward the crypto asset, got a big boost.
The shares of Bitcoin mining firms including Iris Energy, CleanSpark, Marathon Digital, and Riot Platforms surged by over 5% since the ETFs were approved.
However, it was Ether (ETH) – the world’s second-largest and most traded cryptocurrency – that made the most of the announcement. The price of ETH soared as high as 15.5% to $2,606, which was its highest level since May 2022.
Experts speculate that the token powering the leading smart contract blockchain in the industry is surging because the Bitcoin ETF has finally come to fruition and traders are looking to get ahead of the next narrative, which is potential approval for ETFs tracking Ethereum.
The SEC is expected to decide on spot Ethereum ETF applications come May. So far, BlackRock, Invesco, ARK Invest, Fidelity, and VanEck have filed proposals for the ETH funds. Grayscale is also looking to convert its Ethereum trust into a spot ETH ETF.
CBOE BZX Exchange Prepared To List Six BTC Spot ETFs For Trade On Jan 11
Before the SEC greenlighted Bitcoin ETFs, the Cboe BZX exchange sent a letter to the Commission requesting it speed up the registration process. The exchange even sent out listing notifications for six prospective ETFs that would begin trading on January 11.
These include ARK 21Shares Bitcoin ETF, Fidelity Wise Origin Bitcoin Fund, Franklin Bitcoin ETF, Invesco Galaxy Bitcoin ETF, VanEck Bitcoin Trust, and the WisdomTree Bitcoin Fund.
Although the volume of inflows into the new funds, once they begin trading, needs to be seen, the crypto market widely expects the Bitcoin ETFs to drive demand and the price of BTC much higher.
At the time of writing, Bitcoin (BTC) is trading at $45,978 – down 0.2% in the last 24 hours. Meanwhile, Ethereum (ETH) is changing hands at $2,585 – up 8.5% from the previous day.