US SEC Approves Bitcoin ETFs for Daily Trading; Bitcoin Breaks USD 45,000 mark Brothers and founders of Gemini, Tyler and Cameron Winklevoss, first proposed Bitcoin ETFs in 2013, which saw opposition from the regulator. A decade later, the agency approved 11 applications, including that of BlackRock, Ark Investments and 21Shares, Fidelity, Invesco, and VanEck
By Paromita Gupta •
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On Wednesday, the U.S. Securities and Exchange Commission for the first time approved the listing and trading of a number of spot Bitcoin shares. This move will broaden investing in the 15-year-old cryptocurrency.
"I have often said that the Commission acts within the law and how the courts interpret the law. Beginning under Chair Jay Clayton in 2018 and through March 2023, the Commission disapproved more than 20 exchange rule filings for spot bitcoin ETPs. One of those filings, made by Grayscale, contemplated the conversion of the Grayscale Bitcoin Trust into an ETP," said Chair Gary Gensler, U.S. Securities and Exchange Commission in his official statement.
Brothers and founders of Gemini, Tyler and Cameron Winklevoss, first proposed Bitcoin ETFs in 2013, which saw opposition from the regulator. A decade later, the agency approved 11 applications, including that of BlackRock, Ark Investments and 21Shares, Fidelity, Invesco, and VanEck.
The ETHs are expected to begin trading as early as Thursday.
Industry Players Optimistic About the Future
Post the announcement, Bitcoin broke the USD 45,000 mark and was trading at USD 46,298.94 at the time of publishing.
Ethereum also saw an uptick in price post the Bitcoin ETF approval.
Rahul Pagidipati, CEO, ZebPay adds "The potential approval of Spot Bitcoin ETFs not only symbolizes a maturing market but also signifies support from regulatory authorities. This clarity is pivotal for fostering a secure and transparent environment and is essential for the sustained growth of the crypto ecosystem."
Bitcoin ETFs will enable retail investors to hold or store the cryptocurrency. Standard Charted predicts that ETFs could draw $50 billion to $100 billion by the year-end.
"A regulated Bitcoin financial product approved by a major global financial regulatory like the SEC will add a lot of credibility to digital assets which will create trust among institutional investors and encourage more traditional financial institutions to enter the space," shares Shivam Thakral, CEO, BuyUcoin.
ETFs normally have a long-term investment horizon with large ticket purchases which will result in better stability to the highly volatile crypto market.
"The fact that these ETFs are set to trade on major exchanges such as NYSE Arca, Nasdaq, and Cboe BZX Exchange adds further legitimacy to the crypto market. It opens up opportunities for a broader investor base to participate in the crypto space," shares Edul Patel, CEO, Mudrex.
Ashish Singhal, Co-founder and Group CEO, PeepalCo feels that an ETF will be the simplest form of Bitcoin exposure for retail users. "Investors can seamlessly benefit from Bitcoin price movements without the complexities of digital wallets or drastic investment strategy overhauls," he tweets.
"We have seen that approx 5% to 10% of Gold ownership is through ETFs. With the Bitcoin ETFs, people are expecting a good % of Bitcoin ownership to be routed through the ETFs," shares Nischal Shetty, CoFounder, Shardeum.
Rajagopal Menon, Vice President, WazirX feels that this news cycle will continue for some time, "The excitement will then move to Ethereum as speculation will mount about an Ethereum ETF."
Gracy Chen, Managing Director of Bitget, feels that it could unleash significant market demand, driving an upward trend in Bitcoin prices. She also feels that a similiar decision for the Asian markets would be great for the industry, "The majority of Asian regions lean towards regulated financial vehicles. A regulated financial product around Bitcoin in Asia will add to the existing euphoria around digital assets in the region."
While the SEC gave their nod for the investment tool, they do expect due diligence from investors. "While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto," shared Gensler.
