US SEC Approves 11 Spot Bitcoin ETFs

Last Updated on January 11, 2024 by SPN Editor

The U.S. Securities and Exchange Commission (SEC) made a historic decision on Wednesday by approving 11 Spot Bitcoin ETFs, which is the first-ever U.S.-listed exchange-traded funds (ETFs) tracking bitcoin. This marks a significant milestone for the world’s largest cryptocurrency and the broader crypto industry. The SEC greenlit 11 applications from prominent entities such as BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck, signaling a breakthrough for bitcoin by providing investors with exposure to the cryptocurrency without direct ownership.

This development is a game-changer for the crypto industry, which has faced challenges and controversies. The ETFs are seen as a positive step toward institutionalizing bitcoin as a legitimate asset class, according to Andrew Bond, Managing Director and Senior Fintech Analyst at Rosenblatt Securities.

Bitcoin experienced a 3% surge to $47,300 following the SEC’s approval for 11 Spot Bitcoin ETFs, continuing its recent upward trend driven by anticipation of the ETFs. The cryptocurrency reached its highest level since March 2022 this week.

The success of these ETFs will hinge on factors such as fees and liquidity. Analysts emphasize the importance of competitive fees and sufficient liquidity for short-term speculators. Some issuers, including BlackRock and Ark/21Shares, have adjusted their proposed fees, ranging from 0.2% to 1.5%, with waivers for specific periods.

Expecting a surge in interest, companies are preparing for extensive online advertising and marketing campaigns. Bitwise and VanEck are among those who have already released ads promoting bitcoin as a viable investment option.

Despite a fake post on social media platform X claiming premature approval, the SEC’s official announcement stirred celebrations in the crypto industry. The agency is now coordinating with law enforcement to investigate the unauthorized post.

Grayscale CEO Michael Sonnenshein expressed excitement about democratizing access to bitcoin, emphasizing its potential to change the world. Douglas Yones, head of exchange-traded products at the New York Stock Exchange, hailed the approval as a “milestone” for the entire ETF industry.

Fidelity’s Cynthia Lo Bessette sees the new bitcoin ETFs as providing increased choices for investors interested in engaging with cryptocurrencies. Regulatory experts believe these ETFs could pave the way for innovative crypto products, with several issuers already filing for ETFs tracking other cryptocurrencies.

Standard Chartered analysts predict significant inflows, estimating between $50 billion and $100 billion this year. The market capitalization of bitcoin exceeds $913 billion, and the ETFs’ approval is anticipated to have a transformative impact on the evolving crypto landscape.

As of December 2022, total net assets of U.S. ETFs stood at $6.5 trillion, according to the Investment Company Institute. The approval of bitcoin ETFs is expected to further diversify investment options within the broader financial market.

The U.S. Securities and Exchange Commission (SEC) has given the green light to 11 spot Bitcoin Exchange-Traded Funds (ETFs), paving the way for them to commence trading. This marks a significant development in the cryptocurrency sector. Let’s delve deeper into these ETFs:

Spot Bitcoin ETFs: A Spot Bitcoin ETF is an ETF that possesses Bitcoin. The performance of these ETFs is expected to mirror Bitcoin prices, deducting fees and the fund’s trading expenses. The term “spot” denotes the price of a security that is available immediately.

Significance of Spot Bitcoin ETFs: The sanctioning of these ETFs has revolutionized Bitcoin. It provides both institutional and retail investors with the opportunity to gain exposure to the world’s premier cryptocurrency without the need to hold it directly. This is a substantial advancement for the crypto sector, which has been plagued by numerous scandals.

Comparing Spot Bitcoin ETFs and Alternatives Spot Bitcoin ETFs offer several benefits over alternatives like Bitcoin futures ETFs and non-ETF Grantor Trusts:

• Fees: The simultaneous approval of multiple applications sparked intense fee competition among issuers during the application process, which is advantageous for investors. Spot Bitcoin ETFs drastically reduce the exorbitant fees levied by existing crypto funds.
• Impact of Futures on Performance: Investors in Bitcoin futures ETFs incur an additional fee to transition from one futures contract to another, a concern that spot Bitcoin ETFs do not have.
• Tracking Net Asset Value: Non-ETF Grantor Trusts, such as the Grayscale Bitcoin Trust, have difficulty tracking Net Asset Value.

Investing in Spot Bitcoin ETFs Investors should consider investing in these ETFs only if they perceive value in them. Investing out of a fear of missing out is not a sound investment strategy.

Approved 11 Spot Bitcoin ETFs 

The Securities and Exchange Commission’s (SEC) historic approval of 11 Spot Bitcoin ETFs represents a significant development in the cryptocurrency investment landscape. Each of these Spot Bitcoin ETFs is unique and introduced by various financial entities to provide investors with exposure to Bitcoin without direct ownership. The following 11 Spot Bitcoin ETFs have received approval from the regulator, along with their proposed ticker symbols:

1. Blackrock’s iShares Bitcoin Trust (IBIT)
2. ARK 21Shares Bitcoin ETF (ARKB)
3. WisdomTree Bitcoin Fund (BTCW)
4. Invesco Galaxy Bitcoin ETF (BTCO)
5. Bitwise Bitcoin ETF (BITB)
6. VanEck Bitcoin Trust (HODL)
7. Franklin Bitcoin ETF (EZBC)
8. Fidelity Wise Origin Bitcoin Trust (FBTC)
9. Valkyrie Bitcoin Fund (BRRR)
10. Grayscale Bitcoin Trust (GBTC)
11. Hashdex Bitcoin ETF (DEFI)

Blackrock’s iShares Bitcoin Trust (IBIT): This ETF is designed to mirror the price of Bitcoin and is slated to commence trading on Nasdaq.

ARK 21Shares Bitcoin ETF (ARKB): This actively managed ETF aims for 100% exposure to Bitcoin by investing in Bitcoin futures contracts.

WisdomTree Bitcoin Fund (BTCW): Approved by the U.S. Securities and Exchange Commission (SEC), this fund seeks to gain exposure to the price of Bitcoin.

Invesco Galaxy Bitcoin ETF (BTCO): This ETF, listed on the DTCC website under the ticker ‘BTCO’, tracks the price of Bitcoin.

Bitwise Bitcoin ETF (BITB): Set to start trading on January 11, this ETF offers competitive pricing with an expense ratio of 0.20%, which will be reduced to 0% for the first six months on the initial $1 billion in assets.

VanEck Bitcoin Trust (HODL): Effective from January 10, 2024, this ETF’s goal is to mirror the performance of the price of Bitcoin.

Franklin4 Bitcoin ETF: Franklin Templeton, a global investment firm, introduced the Franklin4 Bitcoin ETF. This ETF is poised to allow investors to gain exposure to Bitcoin’s price fluctuations.

Fidelity Wise Origin Bitcoin Trust (FBTC): This ETF, which aims to track the performance of Bitcoin, is expected to be accessible to financial advisors and individual investors from January 11, 2024.

Valkyrie Bitcoin Fund (BRRR): This ETF allows investors to easily incorporate Bitcoin into their portfolios via traditional brokerage accounts.

Grayscale Bitcoin Trust (GBTC): This trust provides investors with a conventional investment vehicle to access Bitcoin.

Hashdex Bitcoin ETF (DEFI): The Hashdex Bitcoin Futures ETF, with the ticker DEFI, provides investors with an opportunity to invest in the world’s premier global asset, managed solely by a global asset manager who specializes in cryptocurrency. DEFI is specifically tailored for forward-thinking investors who are interested in gaining exposure to the price of Bitcoin.