After several years and dozens of rejections, the US Securities and Exchange Commission (SEC) has finally permitted 11 companies to offer spot Bitcoin ETFs.
No trolling this time, no (allegedly) incompetent employee publishing the announcement on the wrong day (more on this shortly), no BS.
It is now set in stone, ten years, four months and ten days after Cameron and Tyler Winklevoss filed their Winklevoss Bitcoin Trust with the regulator, making it the first-ever spot Bitcoin ETF application.
Here’s the first line of the official press release from the US SEC Chair, Gary Gensler:
“Today, the Commission approved the listing and trading several spot bitcoin exchange-traded product (ETP) shares.”
Which firms and trusts got the all-clear? These are, in no particular order:
— BlackRock iShares Bitcoin Trust
— Grayscale Bitcoin Trust
— Fidelity Wise Origin Bitcoin Trust
— VanEck Bitcoin Trust
— Valkyrie Bitcoin Fund
— Hashdex Bitcoin ETF
— WisdomTree Bitcoin Fund
— ARK 21Shares Bitcoin ETF
— Invesco Galaxy Bitcoin ETF
— Franklin Bitcoin ETF
— Bitwise Bitcoin ETP Trust
In the lead-up to this announcement, let’s not forget the memorable commercial Bitwise released a few weeks ago, promoting its ETF.
Weren’t Bitcoin ETFs approved years ago in the US?
You are thinking of futures Bitcoin ETF contracts. This involves buying the asset at a set price at a pre-determined date. The latter’s set of contracts expires monthly and usually occurs on the last Friday of each month.
On the other hand, a spot Bitcoin ETF would allow everyday traders to have exposure to the investment in real-time without holding BTC in a wallet. This option means that the companies operating these products must hold actual BTC instead of owning it on paper.
The latter will permit financial institutions, retirement funds, and fund managers to have direct exposure to Bitcoin through publicly listed products, like trading shares.
It is now far more convenient as it avoids individual entities, each having to register through crypto exchanges and complete KYC AML checks.
SEC X (Twitter) account “hacked”
There isn’t a day that passes by without something crazy happening in this space.
Today (Wednesday, 10 January) was anticipated to be the day that the SEC made its announcement regarding the ETFs, which was the case.
However, in a bizarre lead-up to this, someone reportedly hacked the US SEC X (Twitter) account yesterday. This is the post from Gensler’s X account:
To call this embarrassing is an understatement; I will refrain from ranting.
The original post has since been deleted, but this is the follow-up from the US SEC following its atrocious faux pas:
The issue was resolved after just a few minutes after X reported that t
I believe the reason for this was one of the two possibilities. For the record, both are pure speculation and just my thoughts.
1) A rank-and-file employee from (or hired by) the regulator posted this announcement a day early. They messed up, and the SEC pressured X to report the @SECGov account as being “compromised” as a cover-up.
2) The @SECGov account was genuinely hacked due to negligence.
I reckon it was number one, just to play devil’s advocate.
Many of us love a good-olde conspiracy theory, especially about Bitcoin and crypto, so let’s roll with it.
On a serious note, someone is in deep s*#t, as several traders will be seeking compensation for carrying out trades, assuming that the spot Bitcoin ETFs received the all-clear.
Even though the SEC quickly clarified the information, it doesn’t matter. There were tens (perhaps hundreds) of millions of dollars in trades in that 10- to 15-minute window, and losing money due to misinformation is no joke.
I will provide an update about this shortly.
Will crypto assets also be getting a spot ETF soon?
This has become more of a talking point recently, especially since BlackRock filed for a spot Ethereum ETF with the NASDAQ in November.
It registered its iShares Ethereum Trust as a corporate entity in Delaware, as reported by CoinDesk.
I also wrote about this shortly after that was published, available here:
Shortly after today’s US SEC announcement, ETH’s price (and even ETC, for that matter) started pumping, currently up 10% and 30%, respectively, over the past 24 hours.
Thus, listing a spot Ethereum ETF is widely expected soon. However, I wouldn’t consider this to be the next logical option.
For that, it will probably be XRP.
Why do I believe this? After many years of legal disputes between Ripple Labs and the US SEC in their high-profile lawsuit, it’s only fair to have it next in line.
We know that XRP has been ruled as not a security when listed on public exchanges, following US District Judge Analisa Torres’ verdict last July, granting Ripple Labs a “partial” victory.
#XRPETF is one of the trending hashtags on X, so it is definitely a hot topic of discussion and will continue to be until it sees the light of day.
The events mentioned above, coupled with Grayscale’s victory over the SEC last August regarding its spot Bitcoin ETF filing, have put immense pressure on Gary Gensler and his peers at the US SEC to provide long-overdue crypto regulations in the USA.
Optimism has returned to the crypto space earlier than expected. If you were to go off history, then bullish sentiment really picks up after a Bitcoin block-reward halving. In this case, it started 8–10 months before the 2024 Halving event.
Between today’s massive announcement, the upcoming Bitcoin Halving, a high probability of interest rates going down this year in the USA and the 2024 US Federal Election, expect trillions of dollars of more money to be injected into its economy, with much of it flowing into BTC and crypto assets.
As soon as BTC hits a new all-time high, things will get overwhelming, and money will probably pour into the asset class.
Nothing’s certain, but don’t underestimate the hype.
Why I’d Still Prefer Direct BTC Ownership Over a Spot ETF
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• N.B. None of this is financial advice; I am not a financial advisor. You are ultimately responsible for crypto investments, let alone in any asset class.
• The opinions expressed within this piece are my own and might not reflect those behind any news outlet, person, organisation, or otherwise listed here.
• Please do your research before investing in any crypto assets, staking, NFTs or other products affiliated with this space.
• For transparency, Bitcoin (BTC) accounts for roughly 25% of my crypto portfolio. Way too little for some and too much for others.