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After 10 years in the making, the US Securities and Exchange Commission has given the green light to multiple spot Bitcoin exchange-traded funds (ETFs).
The US corporate regulator approved up to 11 applications overnight, marking a major breakthrough in the crypto sector.
It includes the approval of Grayscale’s initial Bitcoin ETF the crypto asset manager took the SEC to court over.
The SEC also approved applications from NYSE-listed BlackRock, and other private companies including, Ark Invest, 21Shares, Fidelity and Bitewise.
Apollo Crypto Founder and CEO Henrick Andersson said it was a watershed moment for both Bitcoin and crypto.
“It is a game changer for wealth advisors, institutions and retirement funds, now they for the first time have a vehicle that they can easily allocate into,” he said.
With the approval of a spot bitcoin ETF imminent now for some time, predictions on the inflow of bitcoin ETFs have skyrocketed to some US$65 billion, with Mr Andersson claiming that in the coming years, Bitcoin could reach heights of US$200,000.
“It is likely the new ETFs will see billions of dollars of inflow the first couple of days that the issuers such as BlackRock, Franklin Templeton and Fidelity have lined up,” Mr Andersson added.
Trading of Bitcoin ETFs has been given clearance to begin as early as this Thursday, January 11.
Approval controversy
The official SEC approval announcement didn’t all go as planned.
Yesterday, the SEC’s X account was comprised by an unauthorised tweet post leaking the ETF confirmation, one of the most consequential breaches on the platform in years given the prices of bitcoin tumbled soon after.
Today, the virtual currency experienced a modest increase of more than two per cent following the news of the approval, however, now it’s back down trading under half a per cent.
Regulatory oversight
Speaking to The Market Herald, AST Fortis Group Founder and ByteFederal Australia CEO Alek Trpkoski said that with anything financial, there needs to be some regulatory oversight to manage the bitcoin ETFs.
“There will definitely be some rather serious oversite, as the SEC has been cautious in their approach to this approval…” he said.
“It certainly legitimises where crypto sits as an asset class, and approval like this has the potential to increase accessibility and drive mainstream adoption. An SEC-approved ETF would bring some increasing regulatory oversight, with the potential to increase investor confidence.”
Mr Trpkoskie further elaborated that while the announcement is positive, a Bitcoin ETF would not provide investors actual ownership of Bitcoin.
“This implies giving up on some of the advantages of Bitcoin, such as its freedom of transfer, its usage in transactions, and its capacity to be kept as a private asset,” he said.
Mr Trpkoski compared the excitement circling the crypto industry to the launch of Gold ETFs in the early 2000s, which offered a new way for investors to gain exposure to gold prices without physically owning gold.
The move saw many flock to gold funds out of a fear of missing out, before witnessing a pullback in popularity.
Mr Trpkoski further mentioned that with such excitement around the newly approved fund, it would only be a matter of time before a Bitcoin ETF bitcoin or other crypto-based ETF is listed on the ASX.
“The fact that a Bitcoin ETF has been approved is a huge step in the right direction for the cryptocurrency industry, resulting in higher market liquidity, more investment, and even more stability in the Bitcoin market.
“Moreover, it is anticipated to promote innovation and growth within the cryptocurrency industry, fostering the creation of new goods and services, whilst cementing itself into the established financial system.”
