The much-anticipated greenlighting of spot Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission caused quite a stir both in the crypto community and outside of it. It hasn’t been an easy journey, though. It took almost a decade-long battle marked by what felt like an interminable string of rejections and several lawsuits for the SEC to finally concede defeat and reluctantly give the seal of approval to the first batch of spot BTC ETFs.
But the effort was well worth it because, beyond the immediate impact on the Bitcoin price, which was to be expected, this development has much larger and far more extensive effects on the crypto market and the world of investment that one should take the time to explore, especially if they plan to buy Bitcoin p2p anytime soon. So, join us as we delve into the deeper implications of this pivotal event and unveil the full extent of the transformations it can spur.
A Threshold Moment for Crypto
On January 10, the US SEC approved the listing and trading of 11 spot Bitcoin ETFs, marking the end of a long and strenuous journey that began ten years ago when the first application for these types of products was submitted to the regulator and subsequently rejected by them. Many other filings suffered the same fate in the years after, with the SEC citing concerns regarding the volatile nature of digital currencies and the market manipulation risks deriving from crypto-based spot ETFs as the main reasons for their refusal.
In the end, the legal battle that Grayscale won against the SEC after the regulator denied their application for the conversion of their GBTC into a spot BTC ETF, and investment giant Blackrock resubmitting their filing for a similar product, which triggered a chain reaction among established asset managers, left the Commission with no other choice but to sign off on the proposals and accept the launch of spot ETFs holding Bitcoin.
The full list of spot Bitcoin ETFs approved by the SEC includes, in no particular order:
- iShares Bitcoin Trust (IBIT)
- Grayscale Bitcoin Trust (GBTC)
- Invesco Galaxy Bitcoin ETF (BTCO)
- ARK 21Shares Bitcoin ETF (ARKB)
- Bitwise Bitcoin ETF (BITB)
- Fidelity Wise Origin Bitcoin Trust (FBTC)
- Hashdex Bitcoin ETF (DEFI)
- WisdomTree Bitcoin Fund (BTCW)
- Valkyrie Bitcoin Fund (BRRR)
- Franklin Bitcoin ETF (EZBC)
- VanEck Bitcoin Trust (HODL)
The fact that major companies from the traditional finance sphere were willing to include crypto products in their offering was interpreted by analysts as a major vote of confidence for digital currencies. Indeed, in the weeks after their launch, spot Bitcoin ETFs registered record-breaking inflows, with the trading volume for the combined ETFs reaching $35.1 billion in March.
If the launch of spot Bitcoin ETFs didn’t spell it loud enough, the more recent approval of spot Ether ETFs comes to confirm that digital currencies continue their march toward mainstream acceptance. While many worried that history would repeat itself and the SEC would reject or postpone their decision on spot Ether ETFs, things went surprisingly smoothly in Ethereum’s case. And even though the SEC clearly stated that their approval didn’t equate with an endorsement of crypto, there’s no doubt that the emergence of spot crypto ETFs contributed to greater legitimacy for digital assets and boosted investors’ confidence in crypto.
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History in the Making
One could argue that US-based spot BTC ETFs didn’t bring anything new to the table since spot crypto ETF products are not a novelty. Before their debut in the US, spot Bitcoin ETFs were already being traded in Canada, Germany, the island of Jersey, Switzerland, Liechtenstein, Brazil, Guernsey, and the Cayman Islands. So, why exactly is the SEC’s decision interpreted as such a monumental development for the crypto industry?
Although these funds already existed in other parts of the world, spot crypto ETFs remained a relatively small market that didn’t draw much attention before the US joined in. But now, after the introduction of crypto-based spot ETFs in the US, the market has grown exponentially, which benefits spot crypto funds in all countries, giving them more visibility and fostering their progress.
Moreover, the US is often seen as an innovator in terms of financial policies and other countries tend to follow in its footsteps. A relevant example in this respect is Hong King’s approval of crypto-related spot ETFs just three months after the US made the move. On April 15, Hong Kong’s financial regulator, the Securities and Futures Commission (SFC) approved the launch of spot ETFs tracking the live price of Bitcoin and Ether, becoming the first city on the Asian continent to accept crypto as a mainstream investment vehicle.
Australia is the latest country to join the ever-expanding list of nations offering spot crypto ETFs services with the recent launch of Monochrome Asset Management’s Monochrome Bitcoin (BTC) exchange-traded fund (IBTC). The asset manager filed an application for a spot Bitcoin ETF with the Australian Securities & Investments Commission (ASIC) in April, so the approval time was quite short.
Although spot crypto ETFs were already available in the land down under, they didn’t hold Bitcoin directly, so the newly-introduced spot BTC ETF will provide investors with direct access and greater exposure to Bitcoin funds, thus reducing barriers to entry.
Hong Kong and Australia are just two of the countries to be influenced by the launch of spot crypto ETFs in the US. As time goes by, we’re likely going to see more nations jump on the bandwagon and adopt a similar stance on spot crypto ETFs. So, it’s safe to say that interest in officially regulated spot crypto ETF products is bound to increase at a global level.
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