History is Made… Spot Bitcoin exchange-traded funds (ETFs) in the United States.
The U.S. Securities and Exchange Commission (SEC) has officially granted approval for the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States. This significant development follows a false announcement on January 9 from the SEC's official Twitter account, causing market disruption.
On January 10, the SEC approved 19b-4 applications from prominent entities including ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton, endorsing rule changes to enable spot Bitcoin ETFs to be listed and traded on various exchanges.
This historic approval marks the introduction of the first regulated exchange-traded product in the U.S., providing investors direct exposure to Bitcoin's price without the need for self-custody. Investors can purchase shares in ETFs backed by Bitcoin.
The 'Error 404' message temporarily appeared on the SEC website after the approval, raising questions about its release. The SEC analyst, James Seyffart, suggested that the document might have been unintentionally released but anticipated a reposting.
This approval comes over a decade after initial attempts by Cameron and Tyler Winklevoss in 2013, with previous denials citing concerns about market manipulation and fraud. Grayscale's successful court case in August 2023 influenced the SEC to reconsider its stance.
The industry awaits the commencement of trading for these spot Bitcoin ETFs. Analysts predict substantial inflows, with estimates of up to $14 billion in the first year from Galaxy Research and $2.4 billion in the first quarter of 2024 from VanEck.
Notable fee structures were disclosed by issuers, with BlackRock charging 0.2% until reaching $5 billion AUM. Bitwise, Ark 21Shares, and VanEck have fees ranging from 0.24% to 0.25%, with Ark 21Shares waiving fees for the first six months or until reaching $1 billion AUM.
Grayscale remains the highest-fee Bitcoin ETF, imposing a 1.5% fee rate on prospective investors.
The SEC clarified that the approval of spot Bitcoin ETFs does not equate to an endorsement of Bitcoin itself, emphasizing the approval of exchange-traded products.
The SEC is actively investigating a compromised tweet released from its Twitter account on January 9, coordinating efforts with the FBI.
As of January 10, spot Bitcoin ETF offerings from various issuers have been approved for listing on U.S. exchanges, with SEC Chair Gary Gensler clarifying that the approval is for the ETFs, not Bitcoin itself.