Breaking: SEC officially approves spot Bitcoin ETFs

abdelaziz Fathi

The Securities and Exchange Commission (SEC) has approved proposals for spot bitcoin exchange-traded funds (ETFs). The news, initially appearing on the SEC’s website before the link led to a 404 error, marks a pivotal moment in the crypto investment landscape.

Bloomberg ETF analyst James Seyffart confirmed the authenticity of the document on X, even though the direct link from the SEC was no longer working. This approval follows a request from the Cboe BZX exchange for an “acceleration of registration” for proposed spot bitcoin ETFs. The Cboe BZX exchange had even issued listing notifications for six prospective ETFs, anticipating a start of trading on Thursday, prior to the official SEC approval.

Grayscale, one of the leading players in the cryptocurrency investment space, confirmed receiving the necessary regulatory approvals to uplist GBTC to NYSE Arca, with an official press release expected soon.

The approval of spot bitcoin ETFs is expected to attract significant investor interest and capital. Valkyrie Investments co-founder and CIO Steven McClurg anticipates $200 million to $400 million in their ETF, with overall market inflows ranging from $4 to $5 billion in the initial weeks. Other major firms like VanEck, Galaxy, and Bitwise have also made bullish predictions about the inflows into these ETFs, with estimates ranging from $1 billion in the first few days to around $72 billion within five years.

“With Blackrock, Fidelity, Franklin, and Galaxy amongst the parties seeking BTC Spot ETF licenses, and further partnerships from JP Morgan and Goldman leaked recently, it is no surprise that the SEC has moved forward with what is industry consensus and granted these long-delayed licenses. In the short term, we expect continued frothy price accumulation on this news as capital flows into the market from a new class of institutional buyers to crypto looking to hedge with BTC, make these products part of their treasury management, and invest in the future of money itself. If we look for an analogy, Gold jumped approximately 250% four months after its first ETF approval and launched an 8-year bull run,” said Michael Silberberg, Head of Investor Relations at Alt Tab Capital.

This announcement comes after an incident where the SEC’s Twitter account was compromised, falsely claiming the approval of bitcoin ETFs. The erroneous post was quickly deleted, and the SEC clarified that it was unauthorized.

In preparation for the launch, issuers have secured seed funding for their products. VanEck leads with a direct investment of $72.5 million in its potential spot bitcoin ETF. Bitwise and BlackRock have also seeded their proposed ETFs with significant amounts, and Pantera Capital expressed interest in a substantial investment if approved.

Prior to the approval, there was a competitive push among ETF applicants to offer the lowest fees to attract investors. Bitwise set the bar with zero fees for the first six months or until reaching $1 billion in assets, later increasing to 0.2%. BlackRock offered a discounted 0.2% fee for the first year or until the fund reaches $5 billion in assets.

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