- Bitcoin has not just one ETF but 11, ten and a half years after the first one was filed
- Grayscale, Blackrock, Fidelity and more all had their applications approved
- SEC Chair Gary Gensler will be remembered as the man who allowed the Bitcoin ETF after trying to kneecap the crypto sector
Ten and a half years after the Winklevoss twins submitted the first Bitcoin ETF application to the US Securities and Exchange Commission (SEC), the authority has finally bowed to pressure and awarded not just one but 11. Following months of pressure from institutional giants, and the US courts, the SEC removed itself from Bitcoin’s path and allowed the likes of Blackrock, Fidelity, and Grayscale, potentially allowing tens of billions of dollars to flow into the market. Following volatile action pre-announcement (and post-fake announcement) Bitcoin’s price remained stable at $46,000, erasing fears of an immediate collapse.
The Worst-kept Secret in Finance
The approval of a Bitcoin ETF has for the last week been the worst-kept secret in finance, with applicants advertising their seed amounts, undercutting each other with fees, and revealing stock market tickers. The announcement caame yesterday, a day after someone erroneously sent out a tweet confirming the ETF from the SEC’s X account, but this merely preempted what everyone knew was on the cards, especially since Blackrock had said days previously that it expected approval on Wednesday.
Approval duly came, with Chair Gary Gensler forced to open the door to his avowed enemy, noting in a statement that approving the clutch of applications was “the most sustainable path forward”:
We are now faced with a new set of filings similar to those we have disapproved in the past. Circumstances, however, have changed. The U.S. Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP (the Grayscale Order). The court therefore vacated the Grayscale Order and remanded the matter to the Commission. Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares.
Gensler couldn’t help but have a dig at the crypto sector, however, noting that “without prejudging any one crypto asset, the vast majority of crypto assets are investment contracts and thus subject to the federal securities laws,” adding that Bitcoin is the only crypto asset that definitely is not a security. Not that he passed up the opportunity to have a dig at Bitcoin all the same:
Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.
Gensler can crow all he likes, but he will be remembered, for good or ill, as the man whose agency allowed a Bitcoin ETF.
Bitcoin Price Absorbs Sellers
While many, including Fullycrypto, were warning that the ETF approval could be a ‘sell the news’ event, it seems like the rumors leading up to the event took all the volatility out of the market. When false rumors of a rejection surfaced on January 3, Bitcoin’s price dumped almost $5,000, while Tuesday’s fake news bonanza saw it jump to $48,000 and then ditch to $44,750. 12 hours after the news, Bitcoin is sitting at $46,000, having experienced a $3,000 fluctuation, suggesting that, in the short term at least, Bitcoin is not going to experience a mass selloff.
Standard Chartered analysts this week said the Bitcoin ETFs could draw $50-$100 billion this year alone, potentially driving the price of Bitcoin as high as $100,000, while others suggested that inflows will be closer to $55bn over five years. Other analysts have been more cautious in their predictions, saying that ETFs may actually help stabilize crypto prices by broadening their use and potential audience.
Either way, the approval of 11 Bitcoin ETFs is truly a new frontier for Bitcoin, increasing its visibility and accessibility for a new generation of digital natives.
