The Securities and Exchange Commission (SEC) has given the green light to the United States’ first regulated spot Bitcoin exchange-traded funds (ETF) — a significant development that comes a decade after the first application was received. The approval was announced in a Jan. 9 post on X (formerly Twitter), with SEC chair Gary Gensler stating that this would provide investors with “efficient access to digital asset investments within a regulated framework.”
This landmark approval sets the stage for the first regulated exchange-traded product in the U.S. that offers investors direct exposure to the price of Bitcoin without the need to purchase it or worry about self-custody. Instead, investors will buy shares in ETFs that have Bitcoin as their underlying asset.
The journey to this point has been long, with the SEC consistently rejecting all spot Bitcoin ETF requests over the past ten years due to concerns about potential market manipulation and fraud. The first application was made by Cameron and Tyler Winklevoss in 2013 for the Winklevoss Bitcoin Trust. However, the SEC was compelled to reconsider its stance after Grayscale won a court case in August 2023 that overturned the SEC’s denial of its application to convert its Bitcoin Trust into a spot Bitcoin ETF.
With the approval of spot Bitcoin ETFs, the industry is now keenly awaiting the start of trading. Alex Thorn, Galaxy Research head of digital, has projected that spot Bitcoin ETF inflows could hit $14 billion in the first year. Meanwhile, global fund manager VanEck estimates that approximately $2.4 billion would flow into spot Bitcoin products in the first quarter of 2024.
For a spot Bitcoin ETF to be launched in the United States, the SEC must approve both the S-1 (or S-3) and 19b-4 forms submitted by the issuers. On Jan. 8, ten issuers filed their final amended S-1 and S-3 filings, notably announcing the fees they intend to charge for their respective Bitcoin ETFs.
BlackRock, the world’s largest asset manager, will charge 0.2% fees until the fund reaches $5 billion in assets under management (AUM). Bitwise is close behind at 0.24%, while Ark 21Shares and VanEck are slightly higher with 0.25% fees. Ark 21 Shares will waive all fees for the first six months or until the product reaches $1 billion AUM. Grayscale currently has the highest-fee Bitcoin ETF product, with a 1.5% fee rate for its prospective investors.
This is a developing story, and more information will be provided as it becomes available.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | positive |
| Relevance Score | 1 |
| People | Cameron Winklevoss, Gary Gensler, Alex Thorn, Tyler Winklevoss |
| Companies | Grayscale, Bitwise, BlackRock, Galaxy Research, Ark 21Shares, Securities and Exchange Commission, VanEck |
| Currencies | Bitcoin |
| Securities | None |
