SEC Opens Door to Bitcoin ETFs
Posted by Colin Lambert. Last updated: January 11, 2024
A long-awaited moment has arrived for the crypto industry in the US with the Securities and Exchange Commission (SEC) finally granting approval to a number of spot bitcoin exchange traded funds. In keeping with what was a chaotic process from start to finish, the announcement was preceded the previous day by a fake statement of approval, allegedly after the SEC’s X account was hacked.
Wisdom Tree and Bitwise both immediately announced spot bitcoin ETFs, many more are expected over the coming days, while Grayscale said it will uplist an existing bitcoin trust to ETF status.
In a statement, noting that previously similar filings have been disapproved, SEC chair Gary Gensler declares “circumstances have changed”. Most significantly, the US Court of Appeals ruled that the SEC had failed to adequately explain its reasoning in disapproving a proposed bitcoin ETF from Grayscale. Gensler adds that the approvals are for one product only, bitcoing, and stresses, “It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities. Nor does the approval signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws or about the current state of non-compliance of certain crypto asset market participants with the federal securities laws.
“As I’ve said in the past, and without prejudging any one crypto asset, the vast majority of crypto assets are investment contracts and thus subject to the federal securities laws,” he adds.
The Grayscale ETF is to be listed on NYSE Arca, as will the Bitwise product, while Wisdom Tree will list on Cboe BZX Exchange.
“The approval of spot bitcoin ETFs in the United States is a monumental step forward for GBTC (Grayscale Bitcoin Trust) investors and all those who realise the potential for crypto to transform our future,” says Michael Sonnenshein, CEO of Grayscale. “With certainty, Grayscale will continue to serve as a partner and trusted resource to analysts, investors, financial advisors, institutions, and those interested in exploring investments in bitcoin and the crypto asset class.”
Matt Hougan, CIO of Bitwise, says, “It’s hard to fully capture how big today is for bitcoin, but ‘game-changer,’ ‘sea change,’ or ‘turning point’ get closest. For more than a decade, investors who wanted to access the world’s largest crypto asset had to wrestle with how to own it. For many mainstream investors, that hurdle is now gone. We’re excited to see bitcoin take its seat at the table alongside other formerly fringe, now mainstream assets like private equity, private credit, and even gold.”
In markets, bitcoin spiked higher by about $2000 to $47,500, before settling at $46,500 – the SEC’s approval was seen as a matter of time by many observers, however the reality of regulatory permission is expected to see demand rise.