SEC Approves Spot Bitcoin ETFs: Grayscale, BlackRock, Fidelity Lead Charge

KEY TAKEAWAYS

Spot Bitcoin ETFs, arriving on the scene 15 years after BTC's debut, offer institutional and retail investors the chance to get direct exposure to Bitcoin in a regulated form without having to step into crypto territory. 11 ETFs were approved, and as trading began on Thursday, January 11th, the first ETFs began rolling out to investors.

As Wall Street opened this morning, there were new entrants to the market — Spot Bitcoin ETFs, arriving on the scene effectively 15 years after BTC’s debut to the world.

The U.S. Securities and Exchange Commission (SEC) finally — after a rollercoaster few years of debate — approved 11 ETFs, with Grayscale, BlackRock (iShares Bitcoin Trust), and Fidelity Investment Management Services leading the charge as trading opened on Thursday, January 11.

VanEck, ARK, Bitwise, Invesco, Valkyrie, Franklin, WisdomTree, and Hashdex round out the 11 companies deploying a Spot BTC ETF.

ETF approval means institutional and retail investors can now get direct exposure to Bitcoin in a regulated form without having to step into crypto territory.

BTC reacted to the approval, currently sitting at around $48,500, an increase of 7% in 24 hours and 11% over seven days.

The Spot Bitcoin ETFs approval did not come without drama, with the SEC’s X (formerly Twitter) account getting hacked earlier in the week — allegedly the victim of a sim-swap attack and with a lack of two-factor authentication on the account — meaning a fake ‘ETFs are approved’ tweet threw the markets into an early frenzy.

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Still, the official confirmation eventually came through, although with a cautionary note from SEC Chair Gary Gensler, who said:

“While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”

Explaining why the ETFs were approved, Gensler said:

“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 [Exchange Traded Product].

“We are now faced with a new set of filings similar to those we have disapproved in the past. Circumstances, however, have changed.

“The U.S. Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP (the Grayscale Order).

“The court therefore vacated the Grayscale Order and remanded the matter to the Commission.

“Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares.”

As the market opens today and the 11 Spot Bitcoin ETFs start appearing in public, the impact can begin to be felt.

One thing is sure, however, it’s a new era for Bitcoin — legitimized and open to new players in a regulated arena.

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Eddie Wrenn

Eddie Wrenn is a reporter and news editor who has worked in national and international newsrooms in both the UK and Australia, with a particular focus on breaking news and science and technology reporting. He is currently based in London, UK.