SEC Approves First Regulated Bitcoin ETFs in Landmark Decision
Summary:
The U.S. Securities and Exchange Commission (SEC) has approved the first regulated Bitcoin (BTC) exchange-traded funds (ETFs). Various securities companies including ARK 21Shares, Invesco Galaxy, VanEck, and others received approval for their applications, allowing direct investment exposure to Bitcoin through ETFs. This move comes after the SEC's consistent denial of such funds due to potential market manipulation and fraud concerns. More information is expected as the story develops.
In a landmark decision, the U.S. Securities and Exchange Commission (SEC) has given a green light for the nation's first regulated Bitcoin (BTC) exchange-traded funds (ETFs). This official approval comes on the heels of a false announcement via the SEC's Twitter account which sent shockwaves through the markets. The regulator confirmed the approval of the 19b-4 applications from ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, and Franklin Templeton on January 10. These approvals permit alterations in rules that will facilitate the listing and trading of a spot Bitcoin ETF on their respective exchanges. An error message appeared after the filing was featured on the SEC website for a few minutes.
This milestone ruling sets the stage for the debut of the first regulated exchange-traded product in America that offers investors direct access to Bitcoin's price without requiring them to purchase the cryptocurrency or manage its custody. The ETFs will allow investors to purchase shares in funds that count Bitcoin as their primary asset.
The journey toward this approval has been more than a decade in the making, dating back to when Cameron and Tyler Winklevoss first tried to introduce the Winklevoss Bitcoin Trust in 2013. The SEC had consistently rejected proposals for a spot Bitcoin ETF due to fears related to potential market manipulation and fraudulent activities. After Grayscale triumphed in a lawsuit in August 2023, which overturned the SEC's refusal of its application to transform its Grayscale Bitcoin Trust into a spot Bitcoin ETF, the SEC had to reconsider its stance.
With the approval of the spot Bitcoin ETFs, the financial sector is eagerly awaiting the commencement of their trading. Alex Thorn, Galaxy Research's digital head, has projected that inflows into the spot Bitcoin ETF could hit $14 billion within the first year, while global fund manager VanEck predicts about $2.4 billion flowing into the spot Bitcoin products in initial three months of 2024.
The launch of a spot Bitcoin ETF in the U.S. requires that the SEC validates both the S-1 (or S-3) and 19b-4 forms filed by the issuers. On January 8, ten issuers submitted their final amended S-1 and S-3 filings, which included their set fee rates for their respective Bitcoin ETFs. BlackRock, the largest asset manager globally, intends to impose a 0.2% fee until its fund surpasses $5 billion in managed assets. Bitwise has set a slightly higher rate of 0.24%, while Ark 21Shares, and VanEck both come in at 0.25%. Notably, Ark 21 Shares will waive all fees for the first six months or until the fund hits $1 billion in managed assets. On the higher end of the spectrum, Grayscale plans to impose a 1.5% fee on its prospective investors. More updates regarding this developing story will be provided as they arise.
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Published At
1/10/2024 11:55:56 PM
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