Home Bitcoin News Spot Bitcoin ETFs Get SEC Nod: A Decade-Long Odyssey Culminates in a $4 Billion Trading Frenzy

Spot Bitcoin ETFs Get SEC Nod: A Decade-Long Odyssey Culminates in a $4 Billion Trading Frenzy

Bitcoin ETF Approval

After a protracted journey spanning a decade, the awaited launch of spot Bitcoin exchange-traded funds (ETFs) in the United States has finally materialized. The Securities and Exchange Commission (SEC) approved 11 products for listing and trading on various national exchanges, marking a significant stride toward legitimizing the crypto asset class.

The Winklevoss Twins’ Pioneering Effort:

The saga began in 2013 when Cameron and Tyler Winklevoss, co-founders of Gemini crypto exchange, submitted the first-ever application to the SEC for a spot Bitcoin ETF. Simultaneously, Grayscale Investments launched the Bitcoin Investment Trust (GBTC), an open-ended private Bitcoin trust.

Despite numerous adjustments to their application, the SEC rejected the Winklevoss twins’ request in 2017, citing the immaturity of Bitcoin markets. In the same period, Grayscale withdrew its application to convert GBTC into a spot Bitcoin ETF, citing regulatory underdevelopment.

Grayscale’s Persistence and Legal Battle:

Grayscale continued its pursuit, transforming GBTC into an SEC-reporting entity in 2019. In 2021, the asset manager filed another application with the SEC. However, the SEC opted to approve the first U.S. futures Bitcoin ETF instead, leaving spot Bitcoin ETFs in limbo.

By 2022, the SEC had rejected applications from various asset managers, prompting Grayscale to take legal action. In 2023, a federal appeals judge ordered the SEC to reassess Grayscale’s application, setting the stage for a potential breakthrough.

False Alarm and Market Volatility:

Before the landmark Grayscale ruling, several asset managers, including Ark Invest, BlackRock, Fidelity, and Invesco, filed applications for spot Bitcoin ETFs. As optimism swelled, a false tweet from the SEC’s compromised account on January 9, 2024, erroneously announced the approval of all applications. The tweet was swiftly debunked by SEC Chair Gary Gensler, clarifying that the decision had not been authorized.

A Landmark Decision and Trading Frenzy:

Amid market volatility and heightened speculation, the SEC officially granted approval on January 10. The subsequent day witnessed the 11 ETFs commencing trading on multiple securities exchanges, amassing an impressive $4 billion in volumes with over 700,000 trades.

This landmark decision is a testament to the persistence of industry participants over the years, overcoming rejections, legal battles, and false alarms. The approval of spot Bitcoin ETFs signifies a pivotal moment, potentially opening new avenues for institutional participation and providing investors with alternative avenues to access the crypto market.

As the spot Bitcoin ETFs embark on their trading journey, the crypto community watches closely, anticipating their impact on market dynamics, institutional interest, and the broader narrative surrounding digital assets in the financial landscape. The journey that started a decade ago has culminated in a historic development, underscoring the evolving acceptance and integration of cryptocurrencies into the traditional financial realm.

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Sakamoto Nashi

Nashi Sakamoto, a dedicated crypto journalist from the Virgin Islands, brings expert analysis and insight into the ever-evolving world of cryptocurrencies and blockchain technology. Appreciate the work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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