- After years of rejection, the SEC finally approved the first spot bitcoin ETFs in the U.S., ending a 10-year saga and allowing investors direct exposure to bitcoin prices.
- The SEC was forced to revisit its past denials after losing a court case overturning its rejection of Grayscale’s bitcoin ETF application.
- On January 10, 2023, the SEC approved 19b-4 filings from 12 firms to list spot bitcoin ETFs, notably BlackRock which will charge 0.2% fees until the fund reaches $5 billion AUM.
The U.S. Securities and Exchange Commission (SEC) has officially approved the first regulated spot bitcoin (BTC) exchange-traded funds (ETFs) in the United States. This historic decision ends years of rejection and paves the way for investors to gain direct exposure to bitcoin prices without having to self-custody the cryptocurrency.
Background on the Spot Bitcoin ETF Saga
The approval comes more than 10 years after Cameron and Tyler Winklevoss first applied to launch a bitcoin ETF in 2013. The SEC had consistently denied all spot bitcoin ETF requests, citing concerns over potential market manipulation and fraud.
However, the SEC was forced to revisit its position after Grayscale won a court case in August 2022 that overturned the SEC’s denial of its application to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF.
Official SEC Approval of Spot Bitcoin ETFs
On January 10th, 2023, the securities regulator approved the 19b-4 applications from ARK 21Shares, Invesco, Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex and Franklin Templeton. This approval of the rule changes allows these firms to list and trade spot bitcoin ETFs on their respective exchanges.
The filing confirming the approval was briefly available on the SEC website before an Error 404 message appeared. Launching a spot bitcoin ETF in the United States requires the SEC to approve both the S-1 or S-3 and 19b-4 forms filed by the issuers.
On January 9th, ten issuers filed their final amended S-1 and S-3 filings, notably announcing the fees they intend to charge for their respective bitcoin ETFs. BlackRock, the world’s largest asset manager, will charge 0.2% fees until the fund reaches $5 billion in assets under management (AUM).
Potential Impact on Bitcoin Markets
With the spot bitcoin ETFs approved, the industry will closely monitor when the ETFs begin trading and their potential impact on bitcoin prices. Some estimates predict massive inflows into spot bitcoin ETFs in 2023. However, the bitcoin ETF launch may be a “sell the news” event if it fails to attract substantial new institutional investment.
