The long-awaited day when the securities and exchange commission (SEC) will approve spot Bitcoin ETFs has arrived and just as expected, the agency has approved 11 spot Bitcoin ETFs.
The SEC in a message on its official blog announced the approval on Wednesday which was the deadline for decision on some of the applications filed for the ETFs. The official announcement came just hours after a hacker compromised the agency’s official Twitter handle and posted a fake approval announcement.
The 11 approved ETFs are those applied for by Bitwise, Grayscale, Hashdex, BlackRock, Valkyrie, BZX, Invesco, VanEck, WisdomTree, Fidelity and Franklin.
“After careful review, the Commission finds that the Proposals are consistent with the Exchange Act and rules and regulations thereunder applicable to a national securities exchange,” the document states.
However, in an unexpected twist, SEC chair Gary Gensler added a message that the commission has only approved some spot Bitcoin ETFs and not Bitcoin itself.
“While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto,” he said.
It is also noteworthy that while the document approves the issuers’ 19b-4 forms all in one go, they will still need their S-1 forms to be effective for trading to start.
The Expected Result
There has been a lot of anticipation around the approval of even a single spot Bitcoin ETF. The approval was expected to bring a major influx of institutional investors and hence a major inflow of funds that will not only grow Bitcoin but also the entire crypto industry.
Following the approval, the different ETF applicants have their projections on how much they expect to enter the industry when trading commences.
Valkyrie Investments co-founder and CIO Steven McClurg said he expects $200 million to $400 million of investors’ funds coming to Valkyrie’s ETF, and all participants might see $4 to $5 billion of inflows over the first couple of weeks.
Similarly, VanEck estimates that $1 billion of funds would arrive in the first few days, and $2.4 billion within a quarter. Galaxy expects $14 billion within the first year. Bitwise said it anticipated the market for spot bitcoin ETFs to reach around $72 billion within five years.
If these predictions come true or even close to what the ETF issuers are expecting, the spot ETFs will have accomplished the purpose for their creation and the crypto industry could see some significant growth in no distant time.
Crypto Winning
The crypto industry has come a long way in the U.S. it has also faced several challenges, one of which is regulatory challenges that sought to hinder the growth of the industry.
Several firms have applied for spot Bitcoin ETFs for years, but none of them succeeded until now. This came with support from both the legislature and the judiciary who supported the industry when it needed to.
With this milestone, the crypto industry can be said to be winning and may be set on the path to greater growth. If the trend continues with the judiciary and legislature backing the industry, the next milestone could be a clear regulatory framework for the industry which is also long overdue.
