The U.S. Securities and Exchange Commission (SEC) has officially approved the first regulated spot Bitcoin exchange-traded funds (ETFs) in the United States. This decision comes after a recent incident where a false announcement from the SEC's Twitter account caused market turmoil.
On January 10, the SEC gave the green light to the 19b-4 applications from several major firms, including ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton. This approval is significant as it allows these spot Bitcoin ETFs to be listed and traded on their respective exchanges. Initially, there was a brief period of confusion when the filing appeared on the SEC website, followed by an 'Error 404' message, but this was subsequently resolved.
This landmark approval marks a significant milestone in the financial industry. It introduces the first regulated financial product in the U.S. that offers investors direct exposure to the price of Bitcoin. With these ETFs, investors can now purchase shares in funds that have Bitcoin as their underlying asset, eliminating the need for them to directly buy or self-custody Bitcoin. This development is expected to provide a more accessible and regulated avenue for Bitcoin investment in the U.S. financial market.
For an issuer to launch a spot Bitcoin ETF in the United States, the SEC must approve the S-1 (or S-3) and 19b-4 forms. On January 8, ten issuers filed their final amended filings, which included details on the fees they intend to charge for their ETFs.
BlackRock, the world's largest asset manager, will implement a fee of 0.2% until its fund achieves $5 billion in assets under management (AUM). Bitwise is set to charge 0.24%, with Ark 21Shares and VanEck setting their fees at 0.25%. Ark 21Shares, in an aggressive move to attract investors, will waive all fees for the first six months or until the product reaches $1 billion AUM, whichever comes first.
This series of events may not only boost confidence in cryptocurrency as a financial asset but could potentially attract trillions of dollars into the space over time, despite some concerns that the actual launch of the ETFs may not meet the high expectations set by the industry and investors.
Disclaimer: This article offers evolving insights for educational purposes only and should not be considered financial advice. Please conduct your own research before making decisions. The author is not liable for any actions taken based on this information.
Grayscale Investments. "Grayscale Comments on Standard Chartered's Bitcoin ETF Inflow Estimates." Grayscale Investments, 8 Jan. 2024, https://www.axios.com/2023/08/29/bitcoin-grayscale-etf-sec.
U.S. Securities and Exchange Commission. "Statement on Digital Asset Securities Issuance and Trading." U.S. Securities and Exchange Commission (SEC), 8 Dec. 2022, https://www.sec.gov/reports.