SEC authorizes first bitcoin spot exchange-traded funds (ETFs)

From the sector they do not rule out that bitcoin exceeds the threshold of 100,000 dollars this year

The United States Securities and Exchange Commission (SEC) has given the green light to the regulatory changes necessary for the launch of ETFs or bitcoin spot exchange traded funds, which will expand the scope of investment in crypto assets.

The SEC’s position, announced this Wednesday, thus authorizes the negotiation of these products starting today by a handful of firms such as ARK21Shares, Bitwise RK, Hashdex, VanEck, WisdomTree, Fidelity and Franklin Templeton, Invesco Galaxy, Valkyrie or Grayscale.

In its expected decision, the regulator has considered that the proposals “are consistent” with the design requirements of the markets to “prevent fraudulent and manipulative acts and practices” and, “in general, protect investors and the public interest.”

In this way, the SEC has finally given its arm to twist, after having rejected more than twenty applications for cash bitcoin funds in recent years.

However, Grayscale, promoter of one of those presentations initially rejected by the SEC, achieved the support of the Court of Appeals for the District of Columbia, which considered that the regulator had not adequately explained its reasoning for vetoing the listing and marketing of Grayscale.

“We now face a new set of filings similar to those we have rejected in the past. Circumstances, however, have changed,” SEC Chairman Gary Gensler acknowledged on Wednesday. “While today we approve the listing and trading of certain bitcoin ETP spot shares, we do not approve or endorse bitcoin,” he added.

In this sense, the president of the SEC reiterated that investors must be cautious about the innumerable risks associated with bitcoin and those products whose value is linked to cryptocurrencies, noting that bitcoin is mainly a speculative and volatile asset that is also used for activities illicit.

The announced outcome thus closes a long process not without controversy, the last this Tuesday, when the regulator’s official account on X (Twitter) announced the approval of investment products based on bitcoin and a few minutes later deleted the ‘tweet’ and clarify that the service had been “compromised” and used without authorization.

In this regard, the security area of of X, “but rather because an unidentified individual gained control of a phone number associated with the @SECGov account through a third party.”

The price of bitcoin, which in the last year has more than doubled, received the news of the SEC’s authorization with slight advances of around 1%, trading above $46,000, after accumulating a rise of more than 70% since October.

BITCOIN MAY EXCEED 100,000 DOLLARS IN 2024.

After learning of the SEC’s decision, Eric Demuth, co-founder and CEO of the Austrian fintech Bitpanda, highlighted that, although it occurred due to external pressures, after the courts annulled the regulator’s resolutions, “it marks an important milestone that will transform the industry.”

In this way, if many institutional investors were deprived of operating in the crypto sector within its regulatory framework, the new ETFs will be a key tool for institutions and large banks in the United States, which is why the approval of a bitcoin ETF at counted “will further encourage the massive adoption of crypto assets by institutional investors in the United States,” he indicated.

Regarding the impact of the decision on the price of bitcoin, Demuth affirms that the announcement is positive, although he warns that, after the increase in recent months, it may only remain a short-term rebound, since the largest part of the expectation is discounted in the price.

In the long term, however, for the Bitpanda CEO the increase in liquidity and volumes will raise the price of Bitcoin and could also help reduce volatility, highlighting that the additional liquidity in the system along with other factors such as the upcoming halving in mid-April, or the likely lowering of interest rates, “could lead to a six-figure Bitcoin price in the long term.”

“Overcoming the $100,000 barrier this year is a real possibility,” says Demuth, for whom the bitcoin ETF represents a crucial step towards the mass adoption of crypto assets.

HISTORICAL CHAPTER.

For his part, Javier García de la Torre, director of Binance Spain and Portugal, considers that the announcement of the approval in the United States of spot bitcoin ETFs “has marked a historic chapter in the industry.”

In this sense, for the manager of the cryptocurrency infrastructure provider, the approval illustrates a new level of acceptance, maturity and generalization of the crypto market, giving the sector greater credibility and potential to continue innovating.

“Bitcoin spot ETFs will facilitate access to the crypto market, attracting more investors and liquidity,” anticipates García de la Torre, for whom, together with the bitcoin halving effect this year, they can provide a dynamic market for the Bitcoin.

“The bitcoin spot ETF will bring greater credibility to the digital asset sector, building confidence in the market among a broader audience,” he says.