SEC Green-lights Bitcoin Spot ETFs, Revolutionizing Crypto Investment Landscape
Summary:
The U.S. Securities and Exchange Commission has approved the first set of Bitcoin spot exchange-traded funds (ETFs), including submissions from BlackRock, ARK Invest, Fidelity, VanEck, and Invesco. The move, a first of its kind, allows institutional and retail investors to invest in Bitcoin without owning it directly, simplifying the investment process. These Bitcoin ETFs will be listed on several U.S. stock exchanges such as NYSE, CBOE, and Nasdaq. The approval opens up new opportunities and may herald further endorsements for ETFs linked to other key cryptocurrencies.
The global cryptocurrency community is celebrating the U.S. Securities and Exchange Commission's (SEC) endorsement of the inaugural set of Bitcoin spot exchange-traded funds (ETFs). The SEC sanctioned 11 proposals, which included submissions from BlackRock, ARK Invest, Fidelity, VanEck, and Invesco. This landmark step is anticipated to reshape the Bitcoin landscape by enabling institutional and retail investors to stake a claim in the realm of cryptocurrencies without having to own them directly. Instead of purchasing Bitcoin on crypto exchanges such as Binance or Coinbase, investors can now stake their interests in a Bitcoin ETF.
In place of dealing with crypto wallets or taking on the responsibility of cold storage, investors can hold Bitcoin ETFs. This allows them to follow the price of a related commodity or security through the existing mechanisms for index funds. This provides a convenient route to Bitcoin investments for registered investment advisers (RIAs), retirement funds and other institutions. And for investors hesitant to engage with digital assets, Bitcoin ETFs offer a new and validated opportunity.
A spot Bitcoin ETF, quite simply, is about owning the asset and negates the need for any derivative contract. Every investor, thus, owns a portion of Bitcoin. Moreover, investors can opt for Bitcoin futures ETFs, which are agreements to buy or sell Bitcoin at a predetermined price on a specific date, irrespective of the market cost.
Approved ETFs include Grayscale Bitcoin Trust (GBTC), BlackRock’s iShares Bitcoin Trust (IBIT), the Bitwise Bitcoin ETF (BITB), Fidelity’s Wise Origin Bitcoin Trust (FBTC), the ARK 21Shares Bitcoin ETF (ARKB), the Invesco Galaxy Bitcoin ETF (BTCO), VanEck’s Bitcoin Trust (HODL), Franklin Templeton’s Franklin Bitcoin ETF (EZBC), the WisdomTree Bitcoin Fund (BTCW), the Hashdex Bitcoin ETF DEFI and the Valkyrie Bitcoin Fund (BRRR). These ETFs are to be listed on various U.S. stock exchanges such as the New York Stock Exchange (NYSE), the Chicago Board Options Exchange (CBOE), and Nasdaq.
Investors can use brokerages like Charles Schwab, Fidelity, Robinhood, Interactive Brokers to buy Bitcoin ETFs. Crypto exchanges such as Kraken and Coinbase are also planning to offer ETFs. Robo-advisors and traditional banks can facilitate users in buying Bitcoin ETFs. Another alternative for purchasing ETFs is directly from ETF issuers.
The approval of Bitcoin ETFs by the SEC opens fresh avenues for institutional and retail investors. An expected surge in funds into the crypto ecosystem and a subsequent embrace of Bitcoin by the global financial mainstream is on the horizon. The next milestone to anticipate is the approval of ETFs for other key cryptocurrencies, which many view as a natural progression of the crypto scene. However, the moment of realization remains uncertain, but the crypto community remains hopeful.
Published At
1/15/2024 6:47:51 PM
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