According to a notice on its website, the U.S. Securities and Exchange Commission approved 11 applications, including those from VanEck, BlackRock (BLK.N), Ark Investments, 21Shares (ABTC.S), Fidelity, and Invesco (IVZ.N). It is anticipated that certain products would go on sale as early as Thursday.
A decade in the making, the products are a game-changer for bitcoin, providing institutional and ordinary investors with exposure to the largest cryptocurrency in the world without requiring them to own it directly. They also represent a significant advance for an industry plagued by a number of scandals.
This week, economists at Standard Chartered predicted that the ETFs may attract $50 billion to $100 billion just this year, which might push the price of bitcoin above $100,000. According to other forecasts, during a five-year period, inflows will be closer to $55 billion.
"It's a big plus for the institutionalization of bitcoin as an asset class," said Andrew Bond, a managing director at Rosenblatt Securities and senior fintech analyst. "The ETF approval will further legitimize bitcoin."
At $46,924, Bitcoin was up 2.13% as of right now. Several analysts had conjectured that the market might have already priced in the clearance news, given that bitcoin has risen by more than 70% in recent months due to growing expectations of an ETF and that it reached its highest level since March 2022 earlier this week.
The SEC made a U-turn when it gave the go-ahead for bitcoin ETFs, having refused them for ten years because of concerns about their ease of manipulation. SEC Chair Gensler is a fervent opponent of cryptocurrencies.
After a federal appeals court ruled last year that the SEC erred in rejecting Grayscale Investments' proposal to convert its existing Grayscale Bitcoin Trust (GBTC) into an ETF, hopes that the agency would finally allow bitcoin ETFs skyrocketed. The agency was compelled to reconsider its stance by that decision.
In a statement, Gensler stated that in view of the court decision, authorizing the items was "the most sustainable path forward," but he also stated that the agency did not support the volatile and hazardous cryptocurrency bitcoin. The news was welcomed by the crypto community.
Michael Sonnenshein, CEO of Grayscale, said, "Like many of Grayscale's forward-thinking investors, we believed that bitcoin could change the world, and we were and remain excited at the prospect of democratizing access to this asset through a U.S. regulated investment vehicle."
The approval, according to Douglas Yones, head of exchange traded products at the New York Stock Exchange, is a significant "milestone" for the ETF industry, where some of the products will be listed.
The approvals occur one day after an unauthorized individual claimed that the SEC had allowed the new products for trade in a fictitious post that was posted on the agency's social media account, X. The organization swiftly removed and denied the post.
It announced on Wednesday that it is working with law enforcement to investigate the issue, including the Federal Bureau of Investigation and the SEC's internal watchdog.
On Wednesday afternoon, the SEC appeared to have issued a notice on its website indicating that the ETFs had been approved, but later withdrew it and reposted it again, creating even more confusion.
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