It has finished a decade since the first application for a spot bitcoin ETF was made filed. After several denials over the years, the US Securities and Exchange Commission has approved all 11 applications from spot bitcoin ETF issuers, marking a potential watershed moment for the crypto industry and potentially opening the floodgates, making it easier for both institutional investors and consumers. to invest in the largest digital asset.
The issuers are BlackRock’s iShares Bitcoin Trust, Grayscale 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 BitcoinETF and Hashdex Bitcoin Bitcoin ETF. Six of the ETFs will be listed on the Chicago Board Options Exchange (CBOE), three will be on the New York Stock Exchange (NYSE) and two will be traded on the Nasdaq.
Publisher fees range from 0.2% to as much as 1.5%. ARK and 21Shares, BlackRock, Bitwise, Fidelity, WisdomTree, Valkyrie and Invesco and Galaxy are doing intro exemptions with zero fees (except BlackRock at 0.12%) for a limited time.
Following the Securities and Exchange Commission’s approval, Bitcoin’s price was slightly higher on the day at around $45,700, up 161.7% year-to-date, according to CoinMarketCap data.
Spot-based ETFs basically allow investors to indirectly own an asset. 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. Futures-based ETFs use contracts that allow investors to buy or sell an asset at a predetermined price in the future and also allow investors to own that asset indirectly through the fund they bought it from.
“The ETF is the first step in bringing proven financial products and structures from Wall Street into digital assets that people understand,” Muneeb Ali, CEO of Trust Machines, told TechCrunch.
The only crypto-based ETFs in the US approved before today were tied to bitcoin and Ethereum futures and traded on the Chicago Mercantile Exchange. In 2021, BITO, the first connected to bitcoin futures contracts The ETF in the US launched and immediately saw strong demand in the first year. It eventually grew to become one of the largest and most traded crypto ETFs, according to ProShares data.
ETFs can also lend legitimacy to the space and increase adoption by investors who couldn’t access crypto assets beforehand, said John Wu, president of Ava Labs. “With ETFs, legalization, protection and distribution are becoming mainstream and this is a watershed moment for the industry.”
