Several exchange-traded funds (ETFs) linked to the spot price of bitcoin are set to debut in the U.S. on Thursday, marking a significant milestone for the cryptocurrency industry.
After more than a decade of seeking regulatory approval, the U.S. Securities and Exchange Commission gave the green light on Wednesday, approving 11 ETFs, including those from major asset managers like BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck.
This regulatory approval is expected to ignite fierce competition among issuers for market share, with fees becoming a key determinant. Analysts anticipate a gradual build-up of bitcoin ETF flows, reaching over $10 billion in 2024 and aiming for $80 billion by the end of the following year. With fees as low as 0.20%, issuers are vying for investors’ attention by offering competitive fee structures.
Bitcoin, the largest cryptocurrency, witnessed a surge of over 150% in 2023 leading up to the SEC decision, resulting in a market capitalization exceeding $900 billion as of January 10. The approval has the potential to attract substantial institutional inflows into the cryptocurrency market, reshaping the dynamics of crypto investments.
While the SEC had previously rejected spot bitcoin ETFs over investor protection concerns, a shift in its stance became apparent last year following a federal appeals court ruling in favor of Grayscale’s application. The decision has also spurred gains in cryptocurrency-related stocks, with bitcoin miners and crypto-related companies experiencing positive premarket trading.
As the cryptocurrency market adapts to this landmark development, industry players are gearing up for increased competition and strategic positioning within the evolving landscape of cryptocurrency investments.
