SEC Approves the First Spot-Bitcoin ETFs

Table of Contents

• The Road to Approval
• Chair Gery Gensler:
• Background of the SEC's Decision
• Grayscale’s Legal Battle and Result.
• Market Projections and Expectations
• Fee Structures

The SEC officially gave the green light for America’s first regulated spot Bitcoin ETFs. 9 January marks a false start in this landmark decision given the misleading tweet from the SEC which initially caused market turmoil.

The Road to Approval

19b-4 applications from firms including ARK 21Shares, Invesco Galaxy and others were approved by the SEC on this date, allowing these companies to list their spot Bitcoin ETFs for trading. However, an ‘Error 404’ message appeared for a brief moment in place of the approval document on the SEC’s website. Using ETFs, investors will be able to establish an indirect stake in Bitcoin’s price without having to acquire BTC directly or self-storing cryptocurrency.

Source: 34-99306.pdf (sec.gov)

Statement on the Approval of Spot Bitcoin Exhange-Traded Products

Chair Gery Gensler:

“Today, the Commission approved the listing and trading of a number of spot bitcoin exchange-traded product (ETP) shares.

I have often said that the Commission acts within the law and how the courts interpret the law. Beginning under Chair Jay Clayton in 2018 and through March 2023, the Commission disapproved more than 20 exchange rule filings for spot bitcoin ETPs. One of those filings, made by Grayscale, contemplated the conversion of the Grayscale Bitcoin Trust into an ETP.“

Source: SEC.gov | Statement on the Approval of Spot Bitcoin Exchange-Traded Products

Background of the SEC's Decision

The SEC’s decision to approve such a request is also quite the turn of events, given that it had always denied them ever since Cameron and Tyler Winklevoss first tried in 2013. The previous rejections have been mainly due to concerns about market manipulation and fraud.

Grayscale’s Legal Battle and Result.

A key consideration for the revised position of the SEC was Grayscale’s gain court ruling in August 2023.  This victory reversed the SEC’s refusal to allow Grayscale to convert its Bitcoin Trust into a spot Bitcoin ETF, creating an ideal trend for further approvals.

Market Projections and Expectations

Industry watchers are now paying close attention to the market’s performance related to these ETFs. The leading market analysts such as Galaxy Research and VanEck have made large-scale predictions regarding the potential inflows into these ETFs, thus reflecting a generally bullish sentiment in the markets.

Fee Structures

Grayscale charges the highest fee for its Spot Bitcoin exchange-traded fund, while Issuers like BlackRock, Bitwise and Ark 21Shares have announced different pricing structures for their ETFs.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.