Bitcoin ETF Approval Frenzy Begins As SEC Finally Approves First Spot Bitcoin Funds, Bitcoin Remains Unresponsive

Last updated: January 10, 2024 04:17 EST . 2 min read

Disclosure: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. By using this website, you agree to our terms and conditions. We may utilise affiliate links within our content, and receive commission.The SEC’s green light of spot Bitcoin ETFs opens the floodgates for issuers, but Bitcoin price stayed flat, defying expectations. *Image by DREAM DIVE , Adobe Stock.*The SEC has finally approved the first spot Bitcoin exchange-traded funds (ETFs) in the US. This monumental decision opens the floodgates for over a dozen Bitcoin ETF approvals from issuers who have been patiently waiting in the wings, marking the beginning of a new era for cryptocurrency investing. Surprisingly Bitcoin’s price barely budged, only gaining about 1% in the hours after the news broke.

With the Bitcoin ETF approval cemented after years of anticipation, these new spot funds are set to dramatically expand access to Bitcoin investing for millions of investors who prefer the familiar ETF wrapper. Investors can now get Bitcoin exposure in their regular brokerage accounts without being restricted to buying it directly or via futures-based funds.

Competition Heats Up Between Bitcoin ETF Issuers to Offer Best Terms

The dam has burst open and set off a frenzy of activity, with ious US ETF issuers scrambling to offer the most attractive fee structures to appeal to investors. Major names like ARK Invest, Bitwise, Grayscale, Invesco, and more are trying to undercut each other with slashed fees, free periods, and other benefits.

ARK Invest, partnering with 21Shares, announced zero fees for the first 6 months. Bitwise and Invesco joined the fee war with identical 0% offers for their first $5 billion in assets. With almost a dozen competitors, this price battle is just beginning.

How Will Spot Bitcoin ETF Approvals Impact the Market?

The launch of spot Bitcoin ETFs opens crypto investing to the masses in the US by removing barriers like wallets and exchanges. Investors can simply buy shares through normal brokerage accounts. But how the funds will track Bitcoin itself has yet to be seen.

According to ProShares’ Simeon Hyman, Bitcoin futures ETFs have tracked the price “fairly well” so far. Whether spot ETFs can replicate this close correlation is the big question.

Nonetheless, experts are optimistic about the impact. Past Bitcoin ETF-related events have already demonstrated potential impact. When ProShares launched the first Bitcoin futures ETF in October 2021, Bitcoin surged from ~$10k to over $40k within months.

This time, the long-awaited spot ETFs are predicted to unleash even greater inflows. According to Bloomberg, the combined capital inflows could reach up to $20 billion in the first year.

Samson Mow of JAN3 predicts Bitcoin could reach $160,000 or even $1 million following the launches. Anthony Scaramucci also sees rapid gains, estimating Bitcoin could hit $330,000 with the approval.

With the seal of approval cemented at last, it’s clear the SEC is comfortable with the maturing crypto industry and Bitcoin market structure. Their thumbs up will likely even more institutional investors to embrace digital assets. For cryptocurrency advocates, this regulatory green light of a Bitcoin ETF approval represents a validation years in the making.