- SEC approves first U.S. spot Bitcoin ETFs after initial rejection.
- Grayscale wins legal battle, influencing SEC’s reversal on spot Bitcoin ETFs.
- Ark 21Shares waives fees until $1 billion AUM or for six months.
Following an initial unsuccessful attempt on January 9, the Securities and Exchange Commission subsequently authorized multiple spots for Bitcoin exchange-traded funds.
The United States Securities and Exchange Commission has formally sanctioned the country’s inaugural regulated spot Bitcoin exchange-traded funds (ETFs). This approval occurred one day following an erroneous declaration disseminated via the SEC’s verified Twitter handle, which caused turmoil in the financial markets.
On January 10, the securities oversight authority approved the 19b-4 submissions from a group of firms, including ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton. This authorization pertained to regulation amendments that permit the listing and trading of a spot Bitcoin ETF on their respective trading platforms. The document was briefly accessible on the SEC’s online portal before it became inaccessible, displaying an ‘Error 404’ notification.
The approval, which is of historical significance, creates a path for the inaugural exchange-traded product that is regulated within the United States, allowing investors to gain exposure to Bitcoin’s
Over a decade has passed since Cameron and Tyler Winklevoss initially sought approval for the Winklevoss Bitcoin Trust in 2013. The SEC has repeatedly rejected every application for a spot Bitcoin ETF, pointing to worries about the possibility of market manipulation and fraudulent activities.
Nevertheless, the SEC had to reconsider its stance when Grayscale triumphed in a legal battle in August 2023, which resulted in the reversal of the SEC’s previous rejection of Grayscale’s request to transform its Grayscale Bitcoin Trust into a spot Bitcoin ETF.
The industry will now closely monitor the commencement of trading for the approved spot Bitcoin ETFs.
Alex Thorn, the head of digital at Galaxy Research, has projected that inflows into spot Bitcoin ETFs might total $14 billion during the initial year. Concurrently, VanEck, a worldwide fund manager, predicts that approximately $2.4 billion could be invested into spot Bitcoin offerings in the first three months of 2024.
To introduce a spot Bitcoin ETF in the U.S., the issuers must obtain approval from the SEC for the S-1 (or S-3) and 19b-4 forms they submit.
On January 8, ten issuers submitted their ultimate revised S-1 and S-3 documents, specifically disclosing the fees they plan to impose for their individual Bitcoin ETFs.
BlackRock, the globe’s biggest asset manager, is set to impose fees of 0.2% until its fund amasses $5 billion in assets under management (AUM). Bitwise is next in line with fees of 0.24%, while Ark 21Shares and VanEck are just behind, each charging fees of 0.25%.
Significantly, Ark 21 Shares has committed to forgoing all charges for the initial half-year period or until the product’s assets under management (AUM) attain the $1 billion threshold.
Grayscale remains the Bitcoin ETF with the highest fees, charging its potential investors a fee rate of 1.5%.
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