The Securities and Exchange Commission (SEC) yesterday (Wednesday) approved the spot Bitcoin exchange-traded fund (ETF) application of 11 firms in one go. Now, spot Bitcoin ETFs will be listed on the US stock exchanges starting today (Thursday) and can be traded from a general brokerage account.
Eleven Approved Bitcoin ETF Issuers in the US
To approve the Bitcoin ETF, the SEC needed to approve both the S-1 (or S-3) and 19b-4 forms of the issuers, which include ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton.
With the rule change, the Bitcoin ETF issuers can list their products on three American exchanges: NYSE Arca, Nasdaq, and Cboe BZX. These exchanges can list a Bitcoin ETF as soon as today.
Before the approval, the applicants needed to submit amended S-1 applications, revealing fees for the product and other minute details.
“After careful review, the Commission finds that the Proposals are consistent with the Exchange Act and rules and regulations thereunder applicable to a national securities exchange,” the official filing by the SEC noted.
Today, a new chapter unfolds. The approval of Bitcoin ETF’s ushers in a new era.
— Antoni Trenchev (@AntoniNexo) January 10, 2024
Bitcoin cements its role as a universally recognized financial asset across global financial systems. More than that, it shines even brighter as a beacon of change, with the power to sculpt a new…
First Listing on Thursday
Bitwise, a crypto index and fund manager in the US, has already announced that it intends to list its Bitwise Bitcoin ETF today, which will be traded on NYSE Arca under the ticker BITB. Although it will have a management fee of 0.2 percent, it will not charge any fees in the first six months until the asset under management reaches $1 billion.
“We expect significant demand for bitcoin ETFs like BITB,” Bitwise's CEO, Hunter Horsley said.
Other approved Bitcoin issuers, many of which are going to list and trade their products from today, are keeping the fee competitive. The world’s largest asset manager, BlackRock, will charge 0.2 percent fees until the fund reaches $5 billion AUM. Both Ark 21Shares and VanEck will be charging 0.25 percent in fees. Like Bitwise, Ark 21Shares will additionally wave all fees for the first six months until the fund reaches an AUM of $1 billion.
Meanwhile, Grayscale stands apart as it plans to levy 1.5 percent in fees to Bitcoin ETF investors, the highest among all the approved issuers.
#Bitcoin ETFs were (finally) just approved for trading tomorrow, after ten years. Maybe the politics in Congress around cryptocurrency will get better once they realize it's backstopping pension funds and retirement accounts.
— Edward Snowden (@Snowden) January 10, 2024
The SEC's approval for the Bitcoin ETF came about ten years after the Winklevoss twins first applied in 2013. However, the approval witnessed a fair share of drama as the official X account of the regulator was hacked a day before the decision, announcing a fake approval. Although the fake post was quickly taken down, it resulted in a momentary spike in Bitcoin prices and the liquidation of $90 million in long and short positions.
According to Standard Chartered analysts, the Bitcoin ETFs could draw between $50 billion and $100 billion in the first year, while other analysts are conservative and expect inflows to be around $55 billion over the next five years. Galaxy Research’s Head of Digital, Alex Thorn, put forth an expected first-year inflow of $14 billion, while VanEck expects the figure to be roughly $2.4 billion in the first quarter.
We're seeing a bunch of these prospectuses going Effective. S-1's approvals are being checked off.
— James Seyffart (@JSeyff) January 10, 2024
✔️19b-4 Aprrovals
✔️ Effective Prospectuses (S-1's)
These things will indeed begin trading tomorrow. There are no more steps needed pic.twitter.com/YmYyw8b0C9
SEC Chief Speaks Out
In an official statement following the approval, the Chief of the SEC, Gary Gensler pointed out a court decision against the regulator's appeal against “listing and trading of Grayscale’s proposed ETP.”
“I have often said that the Commission acts within the law and how the courts interpret the law,” Gensler added. “Today’s Commission action is cabined to ETPs holding one non-security commodity, bitcoin. It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities. Nor does the approval signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws or about the current state of non-compliance of certain crypto asset market participants with the federal securities laws.”
