After a tumultuous false start on January 9th, the Securities and Exchange Commission (SEC) has officially given its approval for several spot Bitcoin exchange-traded funds (ETFs).
Update on January 10th, 9:10 pm UTC: The SEC website link displaying the approval document continues to show an Error 404.
Update on January 10th, 9:30 pm UTC: The filing indicating SEC approval of spot Bitcoin ETFs is now live on the commission’s website under a different link.
In a historic move, the U.S. Securities and Exchange Commission has granted official approval for the country’s first regulated spot Bitcoin ETFs. This comes just a day after a false announcement from the SEC’s official Twitter account caused chaos in the markets.
On January 10th, the SEC approved the 19b-4 applications from various entities, including ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton. The approval involves rule changes enabling the listing and trading of spot Bitcoin ETFs on respective exchanges. The filing was briefly available for download on the SEC website before an ‘Error 404’ message appeared, later becoming accessible through an alternative link.
This landmark approval opens the door for the first regulated exchange-traded product in the U.S., offering investors direct exposure to Bitcoin’s price without the need for ownership or self-custody concerns. Investors can now purchase shares in ETFs that hold Bitcoin as the underlying asset.
The approval comes over a decade after Cameron and Tyler Winklevoss initially applied to launch the Winklevoss Bitcoin Trust in 2013. The SEC had consistently rejected spot Bitcoin ETF requests, citing concerns over market manipulation and fraud.
The SEC’s reconsideration was prompted by Grayscale’s legal victory in August 2023, overturning the SEC’s denial of its application to convert Grayscale Bitcoin Trust into a spot Bitcoin ETF.
With spot Bitcoin ETFs now approved, industry observers eagerly await the commencement of trading. Alex Thorn, the head of digital at Galaxy Research, estimates inflows of up to $14 billion in the first year, while VanEck predicts approximately $2.4 billion flowing into spot Bitcoin products in the first quarter of 2024.
The launch of a spot Bitcoin ETF in the U.S. necessitates SEC approval for both the S-1 (or S-3) and 19b-4 forms submitted by issuers. On January 8th, ten issuers submitted their final amended S-1 and S-3 filings, revealing the fees they intend to charge for their Bitcoin ETFs.
BlackRock, the world’s largest asset manager, plans to charge 0.2% fees until the fund reaches $5 billion in assets under management (AUM). Bitwise follows closely at 0.24%, while Ark 21Shares and VanEck trail slightly with 0.25% fees.
Ark 21Shares stands out by waiving all fees for the first six months or until the product reaches $1 billion AUM. Currently, Grayscale holds the position of the highest-fee Bitcoin ETF product, imposing a 1.5% fee rate on its prospective investors.
