Bitcoin Spot ETF Enters a New Phase: What You Need to Know
The Bitcoin spot ETF has been officially approved by the U.S. Securities and Exchange Commission (SEC) on January 10, 2024, local time.
The SEC has granted approval for the 19b-4 applications from ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton.
According to CO-CEO Reku, Jesse Choi, this approval has a positive impact on the crypto industry and further facilitates investment access for institutional and retail investors.
Following this approval, the Bitcoin spot ETF is set to enter a new phase. What does that entail? Find out here.
First Trades of Bitcoin Spot ETF to Commence Soon
Bloomberg analyst James Seyffart predicts that the ETF will start trading on January 11. Anthony Rousseau, the head of broker solutions at the multi-asset trading platform TradeStation, echoed a similar sentiment.
Quoting The Block, he stated that attention will be focused on the possibility of inflows within the first 24 to 48 hours after the trading of the Bitcoin spot ETF opens on CBOE, Nasdaq, and NYSE.
"Financial institutions manage over $100 trillion in assets, and a portion of these funds could be allocated to Bitcoin," said Rousseau.
This allocation process is likely to unfold over the next few months as institutions need to follow due processes and conduct in-depth navigation to incorporate Bitcoin into their investment strategies.
VanEck previously estimated that around $2.4 billion would flow into Bitcoin spot products in the first quarter of 2024.
Looking at the bigger picture, crypto investment firm Bitwise predicts that the Bitcoin ETF will become the "most successful" ETF product ever launched and could generate managed assets worth $72 billion within five years.
VanEck advisor Gabor Gurbacs believes that the early days of the Bitcoin ETF are likely to be seen as a "disappointment" but could attract trillions of dollars in new capital into the industry in the long term.
Bitcoin Spot ETF Price Wars
A price war for the purchase fees of the Bitcoin spot ETF will also take place to attract more investors. For instance, Cathie Wood's ARK Invest's 21Shares Bitcoin Spot ETF initially announced a 0.8% fee but later changed it to no fee for the first six months.
Other issuers like Bitwise and Invesco also offer a 0% fee for the first six months, while Grayscale charges a 1.5% fee. BlackRock, the world's largest asset manager, will impose a 0.12% fee for the first 12 months.
Spot ETFs for Other Crypto Assets
This approval also brings a breath of fresh air to the potential spot ETFs for other crypto assets such as ETH, XRP, and more. Major companies like Fidelity and BlackRock have also filed spot Ethereum ETF applications in the past few months.
A month prior, futures-based ETH ETFs were launched, marking the first ETFs based on ether futures and two years after the debut of the first Bitcoin futures ETF.
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*Disclaimer:
This content aims to enrich reader information. Always conduct independent research and use disposable income before investing. All buying, selling, and crypto asset investment activities are the reader's responsibility.
