Its official: the Securities and Exchange Commission (SEC) has approved the spot Bitcoin exchange-traded fund (ETF). The confirmation came just before the expiration of today’s (Wednesday) deadline on the application of the Ark 21Shares Bitcoin Trust.
The official confirmation came a day after a compromised X account of the SEC falsely announced that the regulator showed a greenlight to Bitcoin ETFs. Although the fake tweet was deleted within 30 minutes, it created damages with a momentary spike in BTC prices and liquidation of $90 million in short and long positions. One US lawmaker even called the incident a “market-manipulative mistake” on the part of the SEC.
In the official statement, the SEC wrote: “The Commission therefore believes that the Proposals, as with the other spot commodity ETPs that the Commission has approved,47 are reasonably designed to promote fair disclosure of information that may be necessary to price the shares of the Trusts appropriately, to prevent trading when a reasonable degree of transparency cannot be assured, to safeguard material nonpublic information relating to the Trusts’ portfolios, and to ensure fair and orderly markets for the shares of the Trusts.”
Spot Bitcoin ETF in the US
Companies have been seeking approval for spot Bitcoin ETFs for years now. However, the US regulators have delayed and rejected the applications, citing risks of market manipulation and its inability to protect retail investors.
A total of 14 asset managers have submitted for the approval of a spot Bitcoin ETF in the US. While the crypto-centric companies submitted the initial applications, the interest from Blackrock, the largest traditional asset manager, for a spot Bitcoin ETF drove fresh optimism for the instrument.
One of the significant areas where the offerings of these companies differ is the management fees. According to the SEC filings, the spot Bitcoin ETF of Ark and 21Shares will have a management fee of 0.80 percent. The Fidelity Wise Origin Bitcoin Fund will keep the fee at 0.39 percent, but Bitwise will offer the lowest fee at 0.24 percent.
Success after Years of Effort
Spot Bitcoin ETFs can now be listed on the American stock exchanges, similar to any other listed securities. Retail investors can get direct exposure to cryptocurrencies with their brokerage accounts without requiring an account with a crypto exchange. Further, an ETF eliminates many risks associated with holding cryptocurrencies directly with exchanges, including hacks and frauds.
Some brokers allow their customers to invest in crypto from their brokerage accounts. Still, those investments are either separate crypto offerings, like Robinhood Crypto, or are offered with a direct partnership with crypto exchanges, like Interactive Brokers with Paxos.
While companies waited for years for the approval of the spot Bitcoin ETF, Bitcoin and Ether ETFs tied to futures contracts are already being traded on the Chicago Mercantile Exchange.
Although the regulator in the US took years to approve a spot Bitcoin ETF, many countries have already listed the instrument. Other than the US, spot Bitcoin ETFs are listed in eight jurisdictions, including Canada, Germany, Jersey, Switzerland, and Australia.
This article was written by Arnab Shome at www.financemagnates.com.CryptoCurrency, NewsRead More
You might also be interested in reading Japan’s SBI Investing ‘Eight-Figure’ Sum in Swiss Crypto Bank Sygnum.