The Securities and Exchange Commission (SEC) has approved the spot Bitcoin exchange-traded fund (ETF). Announced today, the confirmation came ahead of the deadline, January 10, for the Bitcoin ETF of Ark and 21Shares.
Companies have been seeking approval for spot Bitcoin ETFs for years now. However, the US regulators have delayed and rejected the applications, citing risks of market manipulation and its inability to protect retail investors.
A total of 14 asset managers have submitted for the approval of a spot Bitcoin ETF in the US. While the crypto-centric companies submitted the initial applications, the interest from Blackrock, the largest traditional asset manager, for a spot Bitcoin ETF drove fresh optimism for the instrument.
One of the significant areas where the offerings of these companies differ is the management fees. According to the SEC filings, the spot Bitcoin ETF of Ark and 21Shares will have a management fee of 0.80 percent. The Fidelity Wise Origin Bitcoin Fund will have the lowest fee at 0.39 percent.
Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.
The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection. pic.twitter.com/oJinqv0wcR
— U.S. Securities and Exchange Commission (@SECGov) January 9, 2024
Success after Years of Effort
Spot Bitcoin ETFs can now be listed on the American stock exchanges, similar to any other listed securities. Retail investors can get direct exposure to cryptocurrencies with their brokerage accounts without requiring an account with a crypto exchange. Further, an ETF eliminates many risks associated with holding cryptocurrencies directly with exchanges, including hacks and frauds.
Some brokers allow their customers to invest in crypto from their brokerage accounts. Still, those investments are either separate crypto offerings, like Robinhood Crypto, or are offered with a direct partnership with crypto exchanges, like Interactive Brokers with Paxos.
While companies waited years to approve the spot Bitcoin ETF, Bitcoin, and Ether ETFs tied to futures contracts are already being traded on the Chicago Mercantile Exchange.
Although the regulator in the US took years to approve a spot Bitcoin ETF, many countries have already listed the instrument. Other than the US, spot Bitcoin ETFs are listed in eight jurisdictions: Canada, Germany, Jersey, Switzerland, and Australia.
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