Spot Bitcoin ETF receives official approval from the SEC
The U.S. Securities and Exchange Commission has officially approved the United States’ first regulated spot Bitcoin ( BTC ) exchange-traded funds (ETFs) — just one day after a false announcement posted from the SEC’s official Twitter account wreaked havoc on markets.
On Jan. 10, the securities regulator approved the 19b-4 applications from ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, and Franklin Templeton — approving the rule changes that allow a spot Bitcoin ETF to be listed and traded on the respective exchanges. The filing was available on the SEC website for several minutes before an ‘Error 404’ message appeared.
The historic approval paves the way for the first regulated exchange-traded product in the U.S. to give investors direct exposure to the price of Bitcoin without requiring them to buy it or worry about self-custody. Investors will buy shares in ETFs holding Bitcoin as its underlying asset.
It comes more than 10 years after Cameron and Tyler Winklevoss first applied to launch the Winklevoss Bitcoin Trust in 2013. The SEC had consistently denied all spot Bitcoin ETF requests, citing concerns over potential market manipulation and fraud.
However, the SEC was forced to revisit its position after Grayscale won a court case in August 2023 that overturned the SEC’s denial of its application to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF.
With the spot Bitcoin ETFs approved, the industry will now closely watch when the ETFs begin trading.
Galaxy Research head of digital Alex Thorn has estimated that spot Bitcoin ETF inflows could reach $14 billion in the first year, while global fund manager VanEck estimates that roughly $2.4 billion would flow into spot Bitcoin products in the first quarter of 2024.
Launching a spot Bitcoin ETF in the United States requires the SEC to approve both the S-1 (or S-3) and 19b-4 forms filed by the issuers.
Related: Bitcoin ETF launch may be a ‘let down’ but could attract trillions over time
On Jan. 8, ten issuers filed their final amended S-1 and S-3 filings, notably announcing the fees they intend to charge for their respective Bitcoin ETFs.
BlackRock, the world’s largest asset manager, will charge 0.2% fees until the fund reaches $5 billion in assets under management (AUM). Bitwise follows close behind at 0.24%, while Ark 21Shares and VanEck trail slightly with 0.25% fees.
Notably, Ark 21 Shares will waive all fees for the first six months or until the product reaches $1 billion AUM.
Grayscale currently stands as the highest-fee Bitcoin ETF product, levying a 1.5% fee rate on its prospective investors.
This is a developing story, and further information will be added as it becomes available.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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