Trading Commences as US SEC Approves 11 Bitcoin ETFs
The United States Securities and Exchange Commission (SEC) has approved the spot Bitcoin exchange-traded fund (ETF) application of 11 firms. There are some official who still expressed their reservation about the development.
Starting today, spot Bitcoin ETFs will be listed on the US stock exchanges and can be traded from a general brokerage account, according to cryptocurrency analysts.
To approve the Bitcoin ETF, the SEC needed to approve both the S-1 (or S-3) and 19b-4 forms of the issuers, which include ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton.
With the rule change, the Bitcoin ETF issuers can list their products on three American exchanges: NYSE Arca, Nasdaq, and Cboe BZX. These exchanges can list a Bitcoin ETF as soon as today.
Before the approval, the applicants needed to submit amended S-1 applications, revealing fees for the product and other minute details.
“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 official filing by the SEC noted.
Bitwise, a crypto index and fund manager in the US, has already announced that it intends to list its Bitwise Bitcoin ETF today, which will be traded on NYSE Arca under the ticker BITB.
Although it will have a management fee of 0.2 percent, it will not charge any fees in the first six months until the asset under management reaches $1 billion.
“We expect significant demand for bitcoin ETFs like BITB,” Bitwise’s CEO, Hunter Horsley said. Other approved Bitcoin issuers, many of which are going to list and trade their products from today, are keeping the fee competitive.
The world’s largest asset manager, BlackRock, will charge 0.2 per cent fees until the fund reaches $5 billion AUM. Both Ark 21Shares and VanEck will be charging 0.25 per cent in fees. Like Bitwise, Ark 21Shares will additionally wave all fees for the first six months until the fund reaches an AUM of $1 billion.
Meanwhile, Grayscale stands apart as it plans to levy 1.5 per cent in fees to Bitcoin ETF investors, the highest among all the approved issuers.
The SEC’s approval for the Bitcoin ETF came about ten years after the Winklevoss twins first applied in 2013. However, the approval witnessed a fair share of drama as the official X account of the regulator was hacked a day before the decision, announcing a fake approval.
Although the fake post was quickly taken down, it resulted in a momentary spike in Bitcoin prices and the liquidation of $90 million in long and short positions.
According to Standard Chartered analysts, the Bitcoin ETFs could draw between $50 billion and $100 billion in the first year, while other analysts are conservative and expect inflows to be around $55 billion over the next five years. Galaxy Research’s Head of Digital, Alex Thorn, put forth an expected first-year inflow of $14 billion, while VanEck expects the figure to be roughly $2.4 billion in the first quarter.
