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On Wednesday, the U.S. Securities and Exchange Commission approved rule changes to allow the creation of Bitcoin exchange-traded funds (ETFs).
The decision comes more than a decade after the initial filing for a crypto-based ETF, a financial product designed to track the performance of various assets such as commodities and equities. The newly approved ETFs will specifically track the spot market price of Bitcoin.
Despite approving spot Bitcoin ETFs, SEC Chair Gary Gensler has not changed his stance on cryptocurrencies. Following the approvals, he reiterated that he does not support or endorse Bitcoin.
Here are the major crypto stories of the week:
SEC Approves Spot Bitcoin ETFs
The SEC has finally approved a range of spot Bitcoin ETF applications. Wall Street giants such as BlackRock, Fidelity, and VanEck, alongside several native crypto firms, are among those bringing these ETFs to the market. ETF approval means institutional and retail investors can now get direct exposure to Bitcoin in a regulated form without stepping into crypto territory.
SEC Approves Spot Bitcoin ETFs: Grayscale, BlackRock, Fidelity Lead Charge (Techopedia)
Now We Have Spot BTC ETFs — What’s Next? (Techopedia)
Spot Bitcoin ETFs Record Over $4 Billion in Trading Volume on First Day
On the first day of trading, trading volume for the 11 instruments totaled more than $4 billion. Grayscale’s converted ETF led the way with more than $1.9 billion in trading volume. BlackRock and Fidelity’s ETFs ranked second and third with $942 million and $628 million in trading, respectively.
Spot bitcoin ETFs hit $4 billion in trading volume on the first day so far (The Block)
Citi to Allow Some Customers to Trade Bitcoin ETFs
Citigroup, meanwhile, “currently provides our institutional clients with access to the recently approved Bitcoin ETFs from an execution and asset servicing perspective,” a spokesperson told CoinDesk Thursday. The New York-based global bank is “evaluating the products for individual Wealth clients.”
UBS, the Zürich-based banking giant, may allow some clients who desire to trade bitcoin ETFs to do so, subject to some conditions. According to the person close to UBS who asked not to be named, the conditions include UBS not being able to solicit the trades, and accounts with a lower risk tolerance won’t be able to buy them.
UBS and Citi Will Let Some Customers Trade Bitcoin ETFs, Contrary to Rumors (CoinDesk)
Vanguard Blocks Clients From Buying Bitcoin ETFs
Vanguard, one of the largest asset managers in the world, will not be allowing customers to buy the newly approved Bitcoin ETFs. An attempt to invest in BlackRock’s iShares Bitcoin Trust (IBIT) or Grayscale Bitcoin Trust (GBTC) via a Vanguard retirement brokerage account generated a “trade cannot be completed” warning.
Investment Giant Vanguard Blocks Clients From Buying Bitcoin ETFs (Insider)
Gary Gensler Says He Does Not Endorse Bitcoin
After a 3-2 vote by SEC commissioners, including Gensler, in favor of allowing spot Bitcoin ETFs, the SEC Chair once again hit back against cryptocurrencies.
“While we approved the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse Bitcoin,” Gensler said in his statement. He also advised investors to remain cautious about the risks associated with Bitcoin and crypto-related products.
Gary Gensler: SEC “Did Not Approve or Endorse Bitcoin” After Spot Bitcoin ETF Approval (Yahoo! Finance)
SEC’s X Account Hacked
The spot Bitcoin ETF announcement came at the end of a tumultuous 24 hours for the popular cryptocurrency, which saw a tweet sent from the account of the SEC announcing the approval of the long-awaited ETFs on Tuesday, leading the price of Bitcoin to spike by more than $1,000. Soon after, the SEC said its account had been “compromised” and that the tweet was “unauthorized”.
The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— Gary Gensler (@GaryGensler) January 9, 2024
Ripple plans to buy back $285 million of its shares, putting the company at a valuation of $11 billion. “We are committing $500 [million] of cash from the balance sheet to convert RSUs and buy back shares – purchasing up to $285 [million] of equity and committing over $200 [million] to convert RSUs. This is at an equity valuation of over $11 [billion],” a Ripple spokesperson told Blockworks.
Ripple commits to buying back $285M worth of shares (Blockworks)
Circle Files for IPO
Circle Internet Financial, the issuer of the world’s second-largest stablecoin, USD Coin (USDC), has quietly filed for an initial public offering (IPO) with federal regulators. “The initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions,” said Circle in a Thursday press release.
Circle’s IPO Filing: Strategic Moves to Outpace Tether and Conquer the African Market? (Techopedia)
The Bottom Line
More than a decade after the initial filing for a crypto-based ETF, the SEC has finally approved spot Bitcoin ETFs.
On the first day of trading, trading volume for the 11 instruments totaled more than $4 billion, marking a glorious debut for the much-anticipated spot Bitcoin ETFs.
Whatever happens next, Bitcoin has entered a new chapter.
