The U.S. Securities and Exchange Commission (SEC) marked a historic moment by approving the first U.S.-listed exchange-traded funds (ETFs) designed to track bitcoin, a significant development for the cryptocurrency industry. The green light was given to 11 applications, with notable players like BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck securing approval. Despite concerns raised by some officials and investor advocates regarding potential risks, the SEC’s decision sets the stage for a new era in the crypto market.
Expected to commence trading on Thursday, the approved ETFs will likely spark intense competition among issuers for market dominance. A decade in the making, these ETFs represent a pivotal shift for bitcoin, providing investors with exposure to the world’s largest cryptocurrency without requiring direct ownership. This move is anticipated to significantly benefit the crypto industry, which has faced its fair share of scandals.
Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities, emphasized the approval’s significance, stating that it is a “huge positive for the institutionalization of bitcoin as an asset class.” As of Wednesday, bitcoin’s market capitalization exceeded $913 billion, while the total net assets of U.S. ETFs stood at $6.5 trillion as of December 2022, according to the Investment Company Institute.
Bitcoin’s value rose by 3% to $47,300 following the announcement, marking a more than 70% increase in recent months as anticipation for the ETF approval grew. With the green light given, companies are gearing up for heightened online advertising and marketing efforts. Some issuers, such as Bitwise and VanEck, have already launched advertisements promoting bitcoin as a viable investment.
The approval came a day after an unauthorized individual published a fake post on the SEC’s social media account falsely claiming approval for the ETFs. Despite this incident and a briefly confusing announcement from the SEC, which appeared to publish and then remove the formal regulatory approval from its website, the crypto industry celebrated the groundbreaking development.
Regulatory experts anticipate that the approval of bitcoin ETFs could open the door for other innovative crypto products. Some issuers have already filed for ETFs tracking the second-largest cryptocurrency, and the market eagerly awaits further developments in this evolving landscape.
