The US Securities and Exchange Commission (SEC) has approved applications to issue the first Bitcoin spot ETFs, taking a major step towards recognizing the first cryptocurrency as a legitimate investment asset class..
SEC Chairman Gary Gensler personally announced the event on the Commission's website. The proposals of all eleven applicant companies were approved at once: Grayscale, BlackRock, Valkyrie, Bitwise, Hashdex, ARK 21Shares, Invesco Galaxy, Fidelity, Franklin Templeton, VanEck and WisdomTree.
Trading of the new investment products is permitted on the New York Stock Exchange (NYSE), Nasdaq and the Chicago Board Options Exchange (CBOE).
From 2018 to March 2023, the Commission rejected more than 20 applications for spot Bitcoin ETFs, the head of the department himself admitted. One of them, filed by Grayscale, proposed converting the Grayscale Bitcoin Trust into an ETF. However, the company went to court with the SEC and won in the Court of Appeals for the District of Columbia Circuit. The court ruled: The Commission failed to adequately explain the reasons for disapproving the application. And he obliged to consider Grayscale’s application again.
“Given these circumstances, I believe that the most correct path would be to approve the listing and trading of units of spot Bitcoin ETP,” explained the head of the department.
The SEC decision specifically mentions ETP (exchange-traded product), in relation to which ETF (exchange-traded fund) is a special case. Literally, the American regulator allowed “listing and trading of shares of investment funds on Bitcoin”. Trusts that offer clients to invest in Bitcoin by buying not BTC, but shares, shares of the trusts (funds) themselves.
“It is important to note: the Commission’s actions in no way signal a willingness to approve listing standards for crypto assets that are securities. The approval also does not mean that the Commission condones the failure of some cryptoasset market participants to comply with federal securities laws.. The vast majority of crypto assets are investment contracts and, therefore, subject to securities laws,” the head of the SEC separately stated in the announcement.
Trading in Bitcoin ETF shares is permitted only on regulated stock exchanges, the official emphasized. Trading on any other exchanges and platforms, through any other intermediaries, is declared not approved by the Commission.
“I would point out that underlying assets like metals ETPs have consumer and industrial utility. While Bitcoin, on the contrary, is primarily a speculative, volatile asset. Which is also used for illegal activities including extortion and money laundering, sanctions evasion and terrorist financing. — Gary Gensler considered it necessary to stipulate. “While we today approved the listing and trading of certain spot Bitcoin ETP units, we did not and do not approve of Bitcoin itself.”.
A little earlier than the announcement, about half an hour before, a document in pdf format appeared on the agency’s website, the SEC’s decision itself. But for quite a long time, the page with the document remained virtually inaccessible, showing a 404 error.
The ghost publication was reminiscent of a story from 24 hours ago, when a tweet announcing the approval of a Bitcoin ETF appeared on the SEC page on X (formerly Twitter). The announcement was taken down after some time, and the head of the SEC announced in his personal account that the publication “was unauthorized.” Thus hinting at unknown attackers. The false start with the announcement cost Bitcoin investors almost $1 billion in losses.
The day before, Gary Gensler posted a long thread on X, where he tried to warn subscribers that crypto investments can be risky.
In recent months, the crypto market has been gripped by a real epidemic of predictions about how Bitcoin will behave after the SEC decision. Forecasts were more often optimistic — that the world's first cryptocurrency would definitely go up. Standard Chartered analysts, for example, said that BTC will reach $200,000.