First Spot-Bitcoin ETFs Gain Approval from SEC
The SEC officially gave the green light for America’s first regulated spot bitcoin ETFs. 9th January marks a false start in this landmark decision as it was preceded by a misleading tweet from the account of the SEC, causing market turmoil.
The Road to Approval
19b-4 applications from firms including ARK 21Shares, Invesco Galaxy, and others were approved by the SEC on January 9th. This allowed these companies to list their spot Bitcoin ETFs for trading. However, for a brief moment, there was an ‘Error 404’ message on the SEC’s website instead of the approval document. Through ETFs, investors will be able to establish an indirect stake in Bitcoin’s price without directly acquiring BTC or self-storing cryptocurrency.
Source: 34-99306.pdf (sec.gov)
Statement on the Approval of Spot Bitcoin Exchange-Traded Products
Chair Gery Gensler:
“Today, the Commission approved the listing and trading of a number of spot bitcoin exchange-traded product (ETP) shares.
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.”
Source: SEC.gov | Statement on the Approval of Spot Bitcoin Exchange-Traded Products
Background of the SEC’s Decision
The SEC’s decision to approve such a request is also quite the turn of events, given that it had always denied them ever since Cameron and Tyler Winklevoss first tried in 2013. The previous rejections have mainly been due to concerns about market manipulation and fraud.
Grayscale’s Legal Overtake and Result.
A key consideration for the revised position of the SEC was Grayscale’s court ruling victory in August 2023. This victory reversed the SEC’s refusal to allow Grayscale to convert its Bitcoin Trust into a spot Bitcoin ETF, creating an ideal trend for further approvals.
Market Projections and Expectations
Industry watchers now pay close attention to the market’s performance related to these ETFs. Leading market analysts such as Galaxy Research and VanEck have made large-scale predictions regarding the potential inflows into these ETFs, reflecting a generally bullish sentiment in the markets “
Regulatory Hurdles and Fee Structures
S-1 and 19b -4 forms should be approved for launching a spot Bitcoin ETF in the U.S.. Grayscale charges the highest fee rate. Issuers like BlackRock, Bitwise, and Ark 21Shares have announced different pricing structures for their ETFs.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
