After months of anticipation, nearly a dozen providers have received the green light from the U.S. Securities and Exchange Commission (SEC) to launch the first spot-based Bitcoin ETF. The SEC has approved all pending Bitcoin ETF applications, paving the way for exposure to a very broad investor base.
Crypto product providers have been applying to the SEC for exchange-traded Bitcoin funds (ETFs) for over a decade. In October 2021, the first breakthrough was achieved with the launch of a futures-based ETF. However, the SEC continued to reject funds with the direct price of Bitcoin (“Spot”). Just over two years later, the pressure from Wall Street banks has overwhelmed the authority. The SEC has just approved eleven different spot-based Bitcoin ETFs, according to an official statement.
An ETF is an investment fund that is traded on exchanges and represents investors’ exposure to a portfolio of assets such as stocks, bonds, or commodities. There are generally two types. Futures-based ETFs track the performance of the underlying assets through futures contracts, while spot-based ETFs track the price development of assets based on their actual market prices. In the case of Bitcoin, futures-based ETFs have some disadvantages for investors – especially in upward trends.
The legal victory of the crypto conglomerate Grayscale against the SEC gave the applicants crucial momentum in August. A three-member appeals panel in Washington D.C. unanimously decided that the categorical rejection of spot-based Bitcoin ETFs was arbitrary. This was followed by the application of the world’s largest asset manager, BlackRock.
Over the past few weeks, BlackRock, VanEck, Valkyrie, Bitwise, Invesco, Fidelity, WisdomTree, Grayscale, Hashdex, and a joint venture between Ark Investments and 21Shares have adjusted their applications several times. All details that the supervisory authority identified as deficiencies in dozens of discussions were clarified. All applications contained similar provisions regarding the prevention of market manipulation and market surveillance, which is why the SEC uniformly gave the green light to the spot Bitcoin ETFs.
Even before the approval, some of the issuers undercut each other in terms of the fees for their products. Bitwise started with an annual management fee of 0.24% – compared to 0.54% for usual US ETFs. VanEck and Ark and 21Shares announced a fee of 0.25% and BlackRock planned 0.3%. But only this morning, BlackRock lowered the management fee of the iShares Bitcoin Trust to 0.25% and the ARK 21Shares Bitcoin ETF followed suit with a reduction to 0.21%. The unprecedented fee war even before the approval of the spot Bitcoin ETFs underlines how much the providers want to secure a share of the expected capital inflows.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | positive |
| Relevance Score | 1 |
| People | None |
| Companies | BlackRock, Invesco, Ark Investments, 21Shares, Hashdex, VanEck, Bitwise, Fidelity, Valkyrie, US-Börsenaufsicht (SEC), Grayscale, WisdomTree |
| Currencies | Bitcoin |
| Securities | None |
