Yahoo Finance Bitcoin ETFs Approved by SEC (for Real) Following Premature Announcement via Hack — What It Means for Investors
In what many hailed as a landmark decision — and after years of anticipation and stalling — the Securities and Exchange Commission (SEC) approved spot Bitcoin exchange traded funds (ETFs) on Jan. 10.
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Since 2021, there have been several Bitcoin-linked ETFs. However, so-called spot Bitcoin ETFs were what many investors and analysts had been hoping for.
Financial behemoths such as BlackRock, Grayscale and Fidelity had all applied for such funds to be approved, and some of them will start trading as early as today.
For instance, Grayscale’s Bitcoin Trust is expected to start trading today on NYSE Arca as the largest spot Bitcoin ETF in the U.S.
“It will be a milestone moment for investors and financial advisors to be able to access Bitcoin in the form of an ETF,” said Jennifer Rosenthal, Grayscale spokeswoman. “The Grayscale team is incredibly proud of the work we have done to grow GBTC into the world’s largest Bitcoin investment vehicle, blazing a path forward for all spot Bitcoin ETFs to come to market.”
Invesco, in partnership with Galaxy Asset Management, announced the launch of the Invesco Galaxy Bitcoin ETF. BlackRock’s spot bitcoin ETF, the iShares Bitcoin Trust, will also start trading today on the Nasdaq, while Fidelity Investments launched the Fidelity Wise Origin Bitcoin fund, according to press releases.
Bitcoin — which is up 170% in the past year — was up about 4% on the morning of Jan. 11, reaching $47,170, according to CoinGecko. Coinbase — which is custodian to eight of the 11 approved ETFs and whose shares are up 224% in the past year — saw its stock decline around 6%.
“ETFs started trading on Thursday’s market opening and crossed $1.2 billion in trading volume within the first 30 minutes of trading, signaling clear enthusiasm from the market,” said Zachary Friedman, co-founder of Secure Digital Markets.
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Providing Legitimacy to the Crypto Space — and More Regulation
Many experts called the SEC’s decision a “momentous day for the crypto industry.”
For more than a decade, Bitcoin and other cryptocurrencies have been wrongly maligned, deliberately misunderstood and discriminated against by many major institutions — at least, according to Christopher Alexander, chief analytics officer for Pioneer Development Group.
“The most significant aspect of this groundbreaking announcement comes from the SEC finally fully legitimizing cryptocurrency. Hopefully this is the start of a rapprochement between the U.S. government and the crypto industry that heralds the start of a new era of cooperation,” he said.
SEC Bitcoin Announcement: What’s the Impact on Price?
As far as Bitcoin price is concerned, Evander Smart, founder of Bitcoin University, expects Bitcoin to double the gains it made last year without Wall Street.
“So Bitcoin should approach $200k this year,” he said. “And the other byproduct of the spot ETF machine is this really eliminates the potential for a significant bear market, which would normally appear in 2026.”
Smart argued that Bitcoin has traditionally had three years on, one year off as an economic cycle.
“Now, with less than 2 million BTC on the exchange market, these assets should be cleared out by the end of 2025, between all the funds, retail, and accredited investors looking to join the famous Bitcoin bull run. With little supply left for 2026, how will a bear market coalesce?” he asked.
This Move May Demystify the Crypto Space More Broadly
These newly approved spot Bitcoin ETFs will also help demystify the space for many retail investors.
In turn, it “will likely suck in a lot of capital for traditional investors, including 401(k)s and pensions funds,” said Bob Ras, co-creator of Sologenic.
Overall, these newly launched products will serve to elevate the rest of the space by making getting exposure to Bitcoin easy for people who might struggle with setting up their own wallets, he added.
Increased Competition To Begin?
Already, investment firms are slashing fees. As CNBC reported, the Bitwise Bitcoin ETF has the lowest expense ratio of all the new Bitcoin funds, at 0.20%. Ark21Shares Bitcoin ETF has a ratio of 0.21% and the iShares Bitcoin Trust (IBIT) rests at 0.25%.
Many funds also have introductory offers, waiving fees for the first six months.
“Now that these ETFs have been approved, we’re going to see fierce competition over customers,” said Phillip Shoemaker, executive director of Identity.com. He added that there will be an extreme amount of marketing competition, with much of it taking the form of price competition around fees.
“We’re already seeing them pushing fees lower and lower, in fact. The big question is, who will be letting customers trade the spot ETF? Will J.P. Morgan let it happen? What about others? If we do see this happen, then we may see BTC hit unprecedented highs,” he added.
Are There Any Drawbacks For Investors?
As David Waugh — lead analyst for Coinbits — pointed out, more than 10 years after the Winklevoss twins filed the first ETF application, investors can now access direct exposure to Bitcoin’s price movements within their brokerage accounts through spot Bitcoin ETFs.
This could help attract some investors who have felt intimidated by the space, and were hesitant to take on the responsibility of managing their private keys.
“Spot ETFs’ convenience and traditional brokerage aspects make them attractive to many non-Bitcoin native investors,” said Waugh. “Yet, the ETFs have drawbacks that investors can avoid by purchasing Bitcoin directly from an exchange or platform. Annual fees, though low, can eat into returns versus paying a one-time fee to buy Bitcoin and withdraw it into self-custody.”
In addition, Waugh noted that most spot ETF buyers can maintain a reasonable level of comfort as qualified custodians hold the underlying Bitcoin for each issuer. However, investors can only sell their Bitcoin for dollars — they cannot withdraw them.
“This presents a significant disadvantage to spot ETFs because it prevents shareholders from accessing one of Bitcoin’s benefits: when they take self-custody of their Bitcoin, holders can transfer it to anyone, anywhere, 24/7, with no third-party approval required,” he said.
Other experts echoed the sentiment, saying that while this development changes Bitcoin’s market dynamics permanently, to the upside, holding Bitcoin itself is the way to go.
“I recommend getting the asset itself and controlling your financial future. Just learn how to do so, properly. Bitcoin is the investment of a lifetime,” said Smart.
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This article originally appeared on GOBankingRates.com: Bitcoin ETFs Approved by SEC (for Real) Following Premature Announcement via Hack — What It Means for Investors
