The First 11 BTC Spot ETFs Officially Approved by the SEC
A big moment for Bitcoin as the SEC approves spot Bitcoin ETFs on January 10th, 2024, offering a new, regulated way for investors to get into Bitcoin.
In a major move, the U.S. Securities and Exchange Commission (SEC) has given the green light to the first-ever spot Bitcoin Exchange-Traded Funds (ETFs). Announced on January 10, 2024, this decision ends a long period of uncertainty and opens up a new way for people to invest in Bitcoin.
TL;DR:
- On January 10th, 2024 the SEC approves the first batch of 11 spot Bitcoin ETFs, easing the way for regulated Bitcoin investments.
- Before the actual approval, a fake X post has been published through the SEC account. The approval followed a court case that questioned the SEC’s previous rejections.
- This decision allows direct investment in Bitcoin, different from Bitcoin futures ETFs, although SEC Chairman Gary Gensler emphasized the SEC's neutral stance and cautioned about Bitcoin’s risks.
- Spot Bitcoin ETFs are a major step in the mainstream financial acceptance of Bitcoin and bring additional positive sentiment into the whole crypto sector.
This change comes after a court criticized the SEC for not explaining well why it said no to similar Bitcoin products in the past. The court focused on Grayscale’s proposed Exchange-Traded Product (ETP) which made the SEC rethink its approach to Bitcoin-related investments.
The SEC's approval is just for ETFs dealing with Bitcoin, not other cryptocurrencies. SEC Chairman Gary Gensler pointed out that the SEC isn't saying Bitcoin is good or bad. He warned that investing in Bitcoin and similar products can be risky.
Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast, bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.
The approval was also accompanied by confusion and speculation caused by a security incident involving the SEC's X account. Supposedly, the account was hacked, leading to an unauthorized tweet that falsely indicated the approval of Bitcoin ETFs.
The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— Gary Gensler (@GaryGensler) January 9, 2024
This post was quickly identified as false, with SEC Chair Gary Gensler clarifying that the SEC had not approved the listing and trading of spot bitcoin exchange-traded products at that time. The unauthorized tweet, which was up for about 30 minutes, caused a brief surge in Bitcoin's price before the clarification was issued. This incident raised questions about the security of official communication channels and the potential impact of such breaches on financial markets.
What's big about this approval is that it lets investors buy into Bitcoin through regulated products, unlike the Bitcoin futures ETFs which are more about betting on Bitcoin's future prices. The SEC has given the go-ahead to 11 applications from big players like BlackRock, Fidelity, and Grayscale. These ETFs will be traded on official stock exchanges with rules to prevent and stop fraud.
Even though the SEC approved these Bitcoin ETFs, they made it clear they aren't backing Bitcoin itself. They remind everyone that Bitcoin is unpredictable and has been used for illegal stuff. So, they advise people to be careful when investing in it.
In short, the SEC’s approval of spot Bitcoin ETFs is a huge step for Bitcoin, showing it's becoming a bigger part of the financial world. It opens up a new and regulated way for more people to invest in Bitcoin.
