Bitcoin briefly surged to $47,000 following the approval of exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC). While this decision is seen as a pivotal moment expanding the investor base for digital assets, the market response was relatively muted as traders eagerly await the performance of these new products.
As of 7:48 a.m. Thursday in London, Bitcoin stabilized at $46,060, retracing some of its earlier gains. The SEC’s approval is considered a landmark move, contributing to Bitcoin’s over 160% surge in the past year, fueled by expectations surrounding ETFs and more lenient monetary policies.
Among other major cryptocurrencies, Ether, the second-largest token, stood out with a notable 9% gain in the past 24 hours, reaching $2,587. Speculators are betting on Ether becoming the focus of the next wave of spot crypto ETF products in the US.
Despite the positive news, concerns lingered among market watchers about a potential pullback for Bitcoin. Questions arose about whether speculators would cash in on profits from the token’s months-long rally.
Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets, noted that the news had mostly been “priced in,” and attention would now shift to closely monitoring inflows into the approved ETFs.
The SEC’s approval included funds from asset management giants BlackRock, Invesco, and Fidelity, along with offerings from smaller competitors like Valkyrie. Leo Mizuhara, founder of DeFi institutional asset manager Hashnote, pointed out that the immediate movement of money into Bitcoin ETFs might primarily involve reallocating from existing Bitcoin exposure, with new money taking time to flow in.
SEC Chair Gary Gensler, who had opposed spot Bitcoin ETFs for over a decade, emphasized caution despite the approval. He highlighted the risks associated with Bitcoin and crypto-related products, underlining the agency’s concerns about fraud and misconduct within the industry.
Notably, the SEC lost a significant legal battle against asset manager Grayscale Investments last year, fueling speculation that the regulator would eventually accept spot ETFs. Grayscale Bitcoin Trust, the largest fund investing in Bitcoin, is now in the process of converting into an ETF.
Gensler’s statement clarified that while the SEC approved certain spot Bitcoin ETFs, it did not endorse or approve Bitcoin itself, urging investors to remain vigilant about the risks tied to crypto.
Despite the regulatory caution, supporters of crypto, including claims of Bitcoin as an inflation hedge and store of value (digital gold), see the approval of spot Bitcoin ETFs in the US as a pivotal moment. Campbell Harvey, a finance professor at Duke University, views this development as crypto transitioning from a niche to mainstream investment, with many investors seeking to diversify portfolios by adding crypto exposure through these ETFs.
