SEC Approves First Spot Bitcoin ETFs: What’s Next?
Nova Reyes
Markets Navigator
TL;DR
The SEC has approved the first spot Bitcoin ETFs in the United States, allowing trading to begin soon. This decision is expected to significantly impact the crypto market.
Key Takeaways
- The SEC approved 11 applications for spot Bitcoin ETFs, including those from major firms like BlackRock and Fidelity.
- SEC Chair Gary Gensler emphasized that the approval does not equate to an endorsement of Bitcoin.
- Trading of spot Bitcoin ETFs is set to begin shortly, with expectations of substantial market inflows.
- Bitcoin prices surged to $47,696.61 following the announcement but later fell to $46,150.99.
- Experts predict ETF inflows could reach between $50 to $110 billion this year.
What Does the SEC Approval Mean?
After years of discussions, the SEC's approval of spot Bitcoin ETFs is a landmark event. The decision came after the SEC lost a legal case regarding a previous Bitcoin ETF proposal. Gensler referred to the approval as the 'Most Sustainable Way Forward,' indicating a shift in regulatory stance.
Gensler's Statements on the Approval
- Most Sustainable Way Forward: Gensler acknowledged the SEC's previous legal setbacks and stated that the approval was a necessary step.
- No Endorsement of Bitcoin: He clarified that the approval does not imply support for Bitcoin, urging investors to be cautious due to the associated risks.
- Bitcoin's Volatility: Gensler described Bitcoin as a speculative and volatile asset, often linked to illegal activities.
When Will Spot Bitcoin ETFs Start Trading?
Trading for the newly approved spot Bitcoin ETFs is expected to commence on Thursday, January 11, 2023. This marks a significant moment for crypto investors eager to engage with these new financial products.
Expert Predictions
Analysts forecast that the introduction of Bitcoin ETFs could attract between $50 to $110 billion in investments this year. Even in less favorable scenarios, inflows are expected to be around $55 billion in the coming years. Following the approval, Bitcoin prices initially rose but later adjusted, currently trading at $46,150.99.
What’s Next for Bitcoin ETFs?
As trading begins, major exchanges like NYSE, Nasdaq, and Cboe Global Markets will facilitate the launch of these ETFs. Investors may take time to familiarize themselves with the trading process, potentially affecting initial inflows.
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