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Historic moment: the SEC approves bitcoin ETFs

Jessie Ramsdale
11. 1. 2024
3 min read

Wednesday's SEC verdict allowing the launch of bitcoin ETFs was a significant step. This paves the way for mainstream investors to diversify their portfolios without directly owning the cryptocurrency. Read on to see how this breakthrough may change the market dynamics and what it represents for the future of bitcoin.

Wednesday became a historic day for the crypto world when the Securities and Exchange Commission (SEC) gave the green light for the launch of 11 new bitcoin spot ETFs. The decision will allow ordinary investors to gain access to the world's largest cryptocurrency without havingto hold bitcoin itself.

However, the excitement surrounding the move was disrupted by a fake social post claiming that approval had already been granted. This unauthorized post caused chaos on Wall Street and drew the attention of the SEC, which issued an official confirmation of approval about 24 hours later.

SEC Chairman Gary Gensler stressed in a statement that the approval of the ETF does not imply endorsement of bitcoin itself, and warned investors of the risks associated with the cryptocurrency. Despite these warnings, however, the cryptocurrency market reacted positively, and the price of bitcoin reached its highest level in two years during 2024.

These endorsements have included some of the biggest names on Wall Street, from BlackRock to Franklin Templeton, as well as a number of firms operating in the cryptocurrency world. These issuers have been competing to keep fees as low as possible in order to attract as many investors as possible once the ETF begins trading.

As these new ETFs come into play, big players like JPMorgan Chase and Goldman Sachs are also joining the fray , offering to help create and redeem shares of the new funds.

This breakthrough comes after a decade of anticipation since the Winklevoss brothers first applied to create a bitcoin spot ETF in 2013 . The SEC has since rejected more than 30 similar requests, but the situation changed last year when giant BlackRock filed to create an ETF. That was followed by other requests from other money managers.

Another key momentwas Grayscale Investments' legal victory over the SEC last August. This victory was a game changer and prompted the SEC to reconsider its stance on bitcoin spot ETFs.

With the advent of these new products, the debate about the impact they will have on the price of bitcoin has once again stirred. Experts estimate that the financial products will attract hundreds of billions of dollars in investments within two years, which could push the price of bitcoin up even further. Bernstein, the company's CEO, even predicts that by 2025 the value of bitcoin could reach $150,000.

BTCUSD

Bitcoin USD

BTCUSD
$61,726.81 $4,655.71 +8.16%
1 Day
+0.08%
5 Days
-1.19%
1 Month
+15.26%
6 Months
-5.93%
YTD
1 Year
-45.61%
5 Years
+141.89%
Max.
+4,921.8%

At the same time, however, warnings about the risks associated with bitcoin remain, and investors are urged to exercise caution when engaging in these new financial instruments. With the new era of spot bitcoin ETFs, a chapter is opening that may shape the future of cryptocurrencies in the mainstream financial world.

Disclaimer: There is a lot of inspiration to be found on Bulios, however, stock selection and portfolio construction is up to you, so always conduct thorough self-analysis.

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