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The U.S. Securities and Exchange Commission (SEC) officially approved several spot Bitcoin exchange-traded funds offerings today (Jan.10) in a long-awaited conclusion to a multi-month saga that has captivated the crypto space.
SEC Chair Gary Gensler confirmed the approvals in a public statement posted to the SEC’s website. “While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin,” he said.
While about a dozen applicants proposed spot BTC ETFs to the SEC, the agency uploaded a form announcing it has granted accelerated approval for the following 11 ETF applications: Grayscale, Bitwise, Hashdex, iShares, Valkyrie, Ark 21, Invesco, VanEck, WisdomTree, FidelityWise, and Franklin.
The SEC’s procedural form disclosing the listings appeared at 3:50 p.m. EST on the SEC website, but was either removed or overwhelmed by traffic shortly after. “‘Order granting accelerated approval’ it’s over. Thank God,” Bloomberg ETF expert Eric Balchunas posted on X.
In response to the announcement, Bitcoin was, at the time of publication, trading just under $46,000. ETH traded over $2,500, over 10% above the previous day, and SOL traded at $101.81.
The approvals come after another round of management fee price cuts by applicants yesterday; Blackrock cut its fee to .25 percent, 25 basis points, with an initial fee of 12 bps for the fund’s first $5 billion, according to Bloomberg ETF expert Eric Balchunas. Ark Invest has cut to 21 bps, and Bitwise has lowered to 20 bps.
What’s Next?
What happens next? Trading should begin imminently, but not today.
“These ETFs start trading tomorrow and attention now turns to the ETH ETF approval process, which has a deadline in the middle of May. This is why ETH is outperforming today as the BTC approval bodes very well for potential further approvals,” said Sergio Silva, Senior Director at Fireblocks, in an interview with nft now.
“Attention now turns to the ETH ETF approval process… This is why ETH is outperforming today as the BTC approval bodes very well for potential further approvals.”
SERGIO SILVA
To Silva, the BTC spot ETF is great for the space. “I think this approval is very positive for the future of digital assets. Having a Bitcoin spot ETF gives traditional investors a regulated vehicle with which they can add exposure to their portfolios. It’s another step towards mainstream acceptance of the value of Bitcoin and other digital assets. Flows into BTC via these ETFs should be quite bullish, considering there are many types of investors who aren’t yet comfortable with self-custody,” he said.
“Now the race begins, but that’s going to be more normal tracking of flows volume, new launches, etc., unlike this emotional roller coaster many of us have been held hostage by for 6mo, and especially last two days. We’re free now,” posted Balchunas.
SIM Swap Drama
The approval comes after a dramatic evening yesterday (Jan. 9) in which the SEC suffered a compromise of its X account due to a SIM swap attack and posted a false announcement approving the securities.
Market volatility, largely due to the false announcement news, caused over $230 million in liquidations in the last 24 hours, with the price of Bitcoin rising to $48,000 on the evening of Jan. 10 before crashing to around $45,000 after the news of the account hack broke.
X’s safety team confirmed that the SEC did not have two-factor authentication on its account and that an unknown person had taken control of the phone number connected to the account.
“We can confirm that the account @SECGov was compromised and we have completed a preliminary investigation. Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party. We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised. We encourage all users to enable this extra layer of security,” they posted late on Jan. 10.
As Coinbase’s security lead has publicly offered to assist the SEC with security concerns around its social media accounts, web3 security researchers like ZachXBT have joined the chorus of obloquy against the SEC. “Hi, @GaryGensler. This is a reminder to secure your financial accounts as well as protect against identity theft and fraud. Remember to use strong passphrases or passwords, set up multi-factor authentication, and keep account alerts turned on, he wrote, ending with the hashtag, #CybersecurityAwarenessMonth.
This ZachXBT post was a verbatim copy of an Oct. 24, 2023 post by Gensler himself.
Editor’s note: This is a developing breaking news story and will be updated.
