On Wednesday, January 10, 2024, the U.S. Securities and Exchange Commission (SEC) has officially granted approval for the first U.S-listed exchange traded funds (ETFs) to track bitcoin. This announcement comes a day after a misleading announcement from the SEC's official Twitter account sent the crypto markets into chaos.
The commission approved the the 19b-4 applications, including from ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton. This approval encompasses the rule changes necessary for a spot Bitcoin ETF to be listed and traded on their respective exchanges.
This is a notable regulatory development related to Bitcoin and it opens the door for the first regulated exchange-traded product in the U.S. This in turn will provide investors with direct exposure to Bitcoin's price without ownership or self-custody concerns. It therefore means that investors can now purchase shares in ETFs backed by Bitcoin as the underlying asset. ETFs would be a game-changer for bitcoin, as it offers institutional and retail investors exposure to the world's largest cryptocurrency.
According to Standard Chartered analysis earlier this week, ETFs approval could attract $50 billion to $100 billion this year alone, and in turn drive the price of bitcoin as high as $100,000. Although SEC had consistently rebuffed spot Bitcoin ETF requests made by Cameron and Tyler Winklevoss initially to launch the Winklevoss Bitcoin Trust in 2013, citing worries about potential market manipulation and fraud, this nod in 2024 is a signal to a bullish crypto market going forward.
The approval of spot Bitcoin ETFs, opens the industry up anticipated robust trading. Galaxy Research's head of digital, Alex Thorn, had estimated an inflow of $14 billion in the first year, while global fund manager VanEck anticipates approximately $2.4 billion flowing into spot Bitcoin products in Q1 2024.
There are still concerns on fees as BlackRock proposes, to charge 0.2% fees until the fund reaches $5 billion in assets under management (AUM). On thr other hand, Bitwise follows closely at 0.24%, while Ark 21Shares and VanEck trail slightly with 0.25% fees. Contrastingly, Ark 21Shares wishes to waive all fees for the first six months or until the product reaches $1 billion AUM. Grayscale will maintains the highest fee among Bitcoin ETF products, imposing a 1.5% fee rate on prospective investors.
This is new era opening in the cryptocurrency industry and it is anticipated that alt coins would join the Bitcoin price rally as many investors would feel safer to invest in Bitcoin ETFs.
If you found the article interesting or helpful, please hit the upvote button, and share for visibility to other hive friends to see. More importantly, drop a comment below. Thank you!
This post was created via INLEO, What is INLEO?
INLEO's mission is to build a sustainable creator economy that is centered around digital ownership, tokenization, and communities. It's Built on Hive, with linkages to BSC, ETH, and Polygon blockchains. The flagship application: Inleo.io allows users and creators to engage & share micro and long-form content on the Hive blockchain while earning cryptocurrency rewards.
Let's Connect
Hive: https://inleo.io/profile/uyobong/blog
Twitter: https://twitter.com/Uyobong3
Discord: uyobong#5966