The SEC gave the green light to multiple financial firms to offer spot bitcoin ETFs.
The Securities and Exchange Commission on Wednesday granted approval to 11 spot bitcoin exchange-traded funds, or ETFs, backed by Wall Street, a key regulatory step expected to drive significant investment in the digital currency.
The agency gave the green light to multiple financial firms to offer spot bitcoin ETFs, including asset management giants like BlackRock, Fidelity Investments and Franklin Templeton that cater to retail investors. Until now, only bitcoin futures ETFs had SEC approval.
Here is a brief list the applicants:
“I am happy to confirm that the Grayscale team has received necessary regulatory approvals to uplist GBTC to NYSE Arca, and we will share a press release with additional information shortly."
Coinbase is pleased:
"The SEC’s approval of 11 spot bitcoin ETFs, eight of which are partnered with Coinbase, is a watershed moment for the expansion of the cryptoeconomy," the company said in a blog post. "Spot bitcoin ETFs introduced by the world’s largest asset managers will unlock diversified pools of new investors to spur long-term growth and product innovation."
iShares Bitcoin Trust (BlackRock)Jane Street Capital, JP Morgan Securities, Macquarie Capital, and Virtu Americas have all been named as authorized participants for BlackRock's Bitcoin ETF.
VanEck Bitcoin Trust (VanEck)Jane Street Capital, Virtu Americas LLC, and ABN AMRO Clearing have all signed agreements to act as authorized participants.
Franklin Bitcoin ETF (Franklin Templeton)Jane Street Capital and Virtu Americas have each signed authorized participant agreements with Templeton.
Fidelity Wise Origin Bitcoin Trust (Fidelity)Fidelity names Jane Street Capital, JP Morgan Securities, Macquarie Capital, and Virtu Americas LLC as authorized participants for its Bitcoin ETF.
Valkyrie Bitcoin Fund (Valkyrie)Jane Street Capital and Cantor Fitzgerald & Co. have signed authorized participant agreements with Valkyrie.
WisdomTree Bitcoin Fund (WisdomTree)The latest filing from WisdomTree shows lists Jane Street Capital, Macquarie Capital, and Virtu Americas as authorized participants.
Invesco Galaxy Bitcoin Fund (Invesco, Galaxy Digital)JP Morgan Securities, Virtu Americas, Jane Street Capital, and Marex Capital Markets Inc. have all signed authorized participant agreements with Invesco.
Bitwise Bitcoin ETF (Bitwise)Jane Street Capital, Macquarie Capital, and Virtu Americas have signed on to be authorized participants for Bitwise's Bitcoin ETF.
Grayscale Bitcoin Trust (Grayscale)Jane Street Capital, Virtu Americas, Macquarie Capital, and ABN AMRO Clearing have all signed authorized participant agreements with Grayscale.
ARK 21Shares Bitcoin ETF (ARK Invest, 21Shares)Jane Street Capital, Macquarie Capital, and Virtu Americas will be authorized participants for ARK's Bitcoin ETF.
Bitcoin prices have shot up on the SEC's approval of the ETFs, more than doubling since last year, CoinDesk's Bitcoin Price Index shows prices for the cryptocurrency had already risen 61% since October on expectations that the SEC planned to grant approval of spot ETF applications, CoinDesk reported.
ETFs are pooled investments, like a mutual fund, but that trade on stock exchanges like a stock or bond and that track a specific index, sector or asset class.
A spot bitcoin ETF allows investors to gain direct exposure to bitcoin without holding it. Unlike regular bitcoin ETFs, in which bitcoin futures contracts are the underlying asset, bitcoins are the underlying asset of a spot bitcoin ETF. Each spot bitcoin ETF is managed by a firm that issues shares of its own bitcoin holdings purchased through other holders or through an authorized cryptocurrency exchange. The shares are listed on a traditional stock exchange.
Investing in spot bitcoin ETFs differs from buying bitcoin directly in a few ways.
First, investors who put money into bitcoin ETFs do not own any bitcoin outright. Second, financial firms will charge fees for trading and managing a bitcoin ETF. By contrast, people who buy bitcoin directly pay a transaction fee, but there are no costs for managing the investment.
There are some advantages to owning bitcoin through an ETF. For example, investors can hold and track their bitcoin ETF in the same brokerage account as their other investments.
Investors are betting that the emergence of spot bitcoin ETFs will pump billions of dollars into the digital currency by making it easier and less intimidating to invest.
Firms like BlackRock and Fidelity are household names in financial services, and their move to enter the sector nudges bitcoin further into the mainstream as an investment class while conferring some some legitimacy to the shadowy and highly volatile crypto industry. And as demand for bitcoin rises, so too will its price, likely spurring even more investment and interest in crypto, experts say.
Increasing investment in bitcoin, coupled with the introduction of new products from reputable financial players, could also accelerate passage of sensible regulations aimed at eliminating fraud and normalizing crypto as a way to invest, make payments and more generally conduct business.
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