It has been a long time path for spot bitcoin ETF filers — and today the US Securities and Exchange Commission finally approved all 11 standing applications from issuers.
“I’ve known for 10 years that this was going to happen,” Michael Sonnenshein, CEO of Grayscale Investments, told TechCrunch’s Chain Reaction. podcast. “We always knew that investor sentiment would get there, regulators would get there and the financial advisor community would get there.”
Grayscale, a digital asset investment firm that was one of 11 companies to apply for a spot bitcoin ETF, is best known for the Grayscale Bitcoin Trust (GBTC), which has now been converted, or “climbed” into its new spot bitcoin Product ETF.
The other 10 issuers are BlackRock’s iShares Bitcoin Trust, ARK 21Shares Bitcoin ETF, Bitwise Bitcoin ETP Trust, WisdomTree Bitcoin Fund, Fidelity Wise Origin Bitcoin Trust, VanEck Bitcoin Trust, Invesco Galaxy Bitcoin ETF, Valkyrie Bitcoin ETF and Hashdex Bitcoin ETF.
Until now, the only crypto-focused ETFs in the US were tied to futures contracts for bitcoin and Ethereum. Spot-focused crypto ETFs are intended to allow both investors and institutions to invest in a crypto asset through a wrapper. When an investor buys shares in a spot-based ETF, they are buying shares of the fund that owns that asset (eg BlackRock) rather than owning it directly, providing investors with an adjustable level of protection.
While futures hit a big milestone in 2021, Sonnenshein believes the most critical that brought these bitcoin spot ETF approvals was the DC Circuit Court of Appeals ruling in favor of Grayscale v. the US Securities and Exchange Commission in the case of a spot for bitcoin ETF in summer 2023.
While this decision overturned the SEC’s previous order denying GBTC’s “elevation” into an ETF, Sonnenshein believes it was “a moment of validation not only for us as an asset manager, but for the industry as a whole. . . that was really the catalyst that broke the log.”
Going into spot ETF approvals for bitcoin, there has been a lot of demand, Sonnenshein said. “A lot of observers and industry watchers, particularly in the financial advisory market realized, even just here in the U.S., there’s about $30 trillion worth of advisory wealth.”
