SEC Ushers In New Era For Crypto With Landmark Bitcoin ETF Approvals For Fund Management Giants

Updated: 11 January 2024

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The United States Securities and Exchange Commission (SEC) approved the trading of a batch of spot Bitcoin ETFs (exchange-traded funds), ushering in a new era for the cryptocurrency industry.

The regulator revealed its approval for 11 applications on Jan. 10, including one from the world’s largest asset manager, BlackRock. Other fund management giants including Ark Invest, Fidelity, Invesco and VanEck also received approval for their applications, with trading of most of the products expected to begin today.

“It’s a huge positive for the institutionalization of bitcoin as an asset class,” Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities, told Reuters.

The Bitcoin price responded to the approvals in a relatively muted way at first, though it has climbed 3.2% in 24 hours to trade at $46,992 as of 6:49 a.m. EST.

Bitcoin ETF Approvals Will Ignite An Influx Of Capital

The approval of spot Bitcoin ETFs is expected to be a catalyst for a multi-billion-dollar capital injection into the crypto market. Earlier this week, analysts from Standard Chartered predicted that up to $100 billion could make its way into the crypto ecosystem this year alone. But other analysts were more conservative, forecasting a lower but still sizable $55 billion in the next five years.

We're seeing a bunch of these prospectuses going Effective. S-1's approvals are being checked off.

✔️19b-4 Aprrovals
✔️ Effective Prospectuses (S-1's)

These things will indeed begin trading tomorrow. There are no more steps needed pic.twitter.com/YmYyw8b0C9

— James Seyffart (@JSeyff) January 10, 2024

This influx of capital could boost the market leader’s price to as high as $100,000 by the end of 2024, added the Standard Chartered analysts. This upward move is then expected to carry on into the following year, which could cause BTC to surge to nearly $200,000 towards the end of 2025.

Spot Bitcoin ETFs entering into the mainstream has also ignited speculation amongst cryptocurrency investors that Ether and XRP ETFs may soon become a reality as well. Contributing to this speculation is the S-1 form filed with the SEC by BlackRock for its iShares Ethereum Trust at the end of last year.

Spot Bitcoin ETF Approval Is Not A Bitcoin Endorsement By The SEC

Still, SEC Chair Gary Gensler, who has waged war against the crypto space over the past year, responded to the landmark approval by saying, “We did not approve or endorse bitcoin,” and warned investors of the “myriad of risks associated with bitcoin and products whose value is tied to crypto.”

He also put to rest any speculation that the SEC has changed its stance towards the crypto sector. In the statement, he added that the approvals, “should in no way signal the commission’s willingness to approve listing standards for crypto asset securities.”