Breaking: The SEC Approves Spot Bitcoin ETF

by Arnab Shome
  • Confirmation came a day after SEC's X account was compromised stating it had given Bitcoin ETFs a greenlight.
  • More than a dozen asset managers have submitted applications for a spot Bitcoin ETF in the US.
Bitcoin ETF approved
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Its official: the Securities and Exchange Commission (SEC) has approved the spot Bitcoin exchange-traded fund (ETF). The confirmation was made just before the expiration of today's (Wednesday) deadline on the application of the Ark 21Shares Bitcoin Trust.

The official confirmation came a day after a compromised SEC's X account falsely announced that the regulator gave Bitcoin ETFs a greenlight. Although the fake tweet was deleted within 30 minutes, it caused damages with a momentary spike in BTC prices and liquidation of $90 million in short and long positions. One US lawmaker even called the incident a "market-manipulative mistake" on the part of the SEC.

In the official statement, the SEC wrote: "The Commission therefore believes that the Proposals, as with the other spot commodity ETPs that the Commission has approved, 47 are reasonably designed to promote fair disclosure of information that may be necessary to price the shares of the Trusts appropriately, to prevent trading when a reasonable degree of transparency cannot be assured, to safeguard material nonpublic information relating to the Trusts’ portfolios, and to ensure fair and orderly markets for the shares of the Trusts."

Source: SEC
Source: SEC

Spot Bitcoin ETF in the US

Companies have been seeking approval for spot Bitcoin ETFs for years now. However, the US regulators have delayed and rejected the applications, citing risks of market manipulation and its inability to protect retail investors.

A total of 14 asset managers have submitted for the approval of a spot Bitcoin ETF in the US. While the crypto-centric companies submitted the initial applications, the interest from Blackrock, the largest traditional asset manager, for a spot Bitcoin ETF drove fresh optimism for the instrument.

One of the significant areas where the offerings of these companies differ is the management fees. According to the SEC filings, the spot Bitcoin ETF of Ark and 21Shares will have a management fee of 0.80 percent. The Fidelity Wise Origin Bitcoin Fund will keep the fee at 0.39 percent, but Bitwise will offer the lowest fee at 0.24 percent.

JJ Kinahan, the CEO of IG North America and President of tastytrade, mentioned in an email sent to Finance Magnates: “We’re always in favor of allowing retail traders and investors to make their own self-directed decisions, and we see crypto as a product that is truly not going away – and in fact, it seems to be getting more support year after year. Retail traders and investors should be able to, as appropriate, choose to invest in and or trade this product as fits their investment needs.”

Success after Years of Effort

Spot Bitcoin ETFs can now be listed on the American stock exchanges, similar to any other listed securities. Retail investors can get direct exposure to cryptocurrencies with their brokerage accounts without requiring an account with a crypto exchange. Further, an ETF eliminates many risks associated with holding cryptocurrencies directly with exchanges, including hacks and frauds.

Some brokers allow their customers to invest in crypto from their brokerage accounts. Still, these investments are either separate crypto offerings, like Robinhood Crypto, or partnerships with crypto exchanges, such as Interactive Brokers with Paxos.

While companies have waited for years for the approval of the spot Bitcoin ETF, Bitcoin and Ether ETFs tied to futures contracts are already being traded on the Chicago Mercantile Exchange.

Although the regulator in the US took years to approve a spot Bitcoin ETF, many countries have already listed the instrument. Other than the US, spot Bitcoin ETFs are listed in eight jurisdictions, including Canada, Germany, Jersey, Switzerland, and Australia.

Its official: the Securities and Exchange Commission (SEC) has approved the spot Bitcoin exchange-traded fund (ETF). The confirmation was made just before the expiration of today's (Wednesday) deadline on the application of the Ark 21Shares Bitcoin Trust.

The official confirmation came a day after a compromised SEC's X account falsely announced that the regulator gave Bitcoin ETFs a greenlight. Although the fake tweet was deleted within 30 minutes, it caused damages with a momentary spike in BTC prices and liquidation of $90 million in short and long positions. One US lawmaker even called the incident a "market-manipulative mistake" on the part of the SEC.

In the official statement, the SEC wrote: "The Commission therefore believes that the Proposals, as with the other spot commodity ETPs that the Commission has approved, 47 are reasonably designed to promote fair disclosure of information that may be necessary to price the shares of the Trusts appropriately, to prevent trading when a reasonable degree of transparency cannot be assured, to safeguard material nonpublic information relating to the Trusts’ portfolios, and to ensure fair and orderly markets for the shares of the Trusts."

Source: SEC
Source: SEC

Spot Bitcoin ETF in the US

Companies have been seeking approval for spot Bitcoin ETFs for years now. However, the US regulators have delayed and rejected the applications, citing risks of market manipulation and its inability to protect retail investors.

A total of 14 asset managers have submitted for the approval of a spot Bitcoin ETF in the US. While the crypto-centric companies submitted the initial applications, the interest from Blackrock, the largest traditional asset manager, for a spot Bitcoin ETF drove fresh optimism for the instrument.

One of the significant areas where the offerings of these companies differ is the management fees. According to the SEC filings, the spot Bitcoin ETF of Ark and 21Shares will have a management fee of 0.80 percent. The Fidelity Wise Origin Bitcoin Fund will keep the fee at 0.39 percent, but Bitwise will offer the lowest fee at 0.24 percent.

JJ Kinahan, the CEO of IG North America and President of tastytrade, mentioned in an email sent to Finance Magnates: “We’re always in favor of allowing retail traders and investors to make their own self-directed decisions, and we see crypto as a product that is truly not going away – and in fact, it seems to be getting more support year after year. Retail traders and investors should be able to, as appropriate, choose to invest in and or trade this product as fits their investment needs.”

Success after Years of Effort

Spot Bitcoin ETFs can now be listed on the American stock exchanges, similar to any other listed securities. Retail investors can get direct exposure to cryptocurrencies with their brokerage accounts without requiring an account with a crypto exchange. Further, an ETF eliminates many risks associated with holding cryptocurrencies directly with exchanges, including hacks and frauds.

Some brokers allow their customers to invest in crypto from their brokerage accounts. Still, these investments are either separate crypto offerings, like Robinhood Crypto, or partnerships with crypto exchanges, such as Interactive Brokers with Paxos.

While companies have waited for years for the approval of the spot Bitcoin ETF, Bitcoin and Ether ETFs tied to futures contracts are already being traded on the Chicago Mercantile Exchange.

Although the regulator in the US took years to approve a spot Bitcoin ETF, many countries have already listed the instrument. Other than the US, spot Bitcoin ETFs are listed in eight jurisdictions, including Canada, Germany, Jersey, Switzerland, and Australia.

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