In a historic move, the U.S. Securities and Exchange Commission (SEC) approved regulatory changes that will allow the first spot Bitcoin exchange-traded fund (ETF) to begin trading. This approval is a huge milestone in the cryptocurrency industry as it comes after nearly a decade of continuous efforts and numerous rejections by the SEC.
But the SEC rule change document announcing the approval disappeared after appearing briefly on the regulator’s website. However, you can still view it by using the archived version of the URL.
“After careful review, the SEC found that the proposal complies with the exchange laws and rules and regulations applicable to securities exchanges,” the commission said.
The SEC said the rule change will allow NYSE Arca to convert Grayscale Bitcoin Trust into a spot Bitcoin ETF and list new Bitwise Bitcoin ETF and Hashdex Bitcoin ETF. Nasdaq plans to list BlackRock’s iShares Bitcoin Trust
and the Valkyrie Bitcoin Fund; Cboe’s BZX exchange has listed ARK 21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, VanEck Bitcoin Trust, WisdomTree Bitcoin Fund, Fidelity Wise Origin Bitcoin Fund, and Franklin Bitcoin ETF.
This means that all 11 qualified applicants are now authorized to trade on US exchanges.
Exchange-traded funds (ETFs) are investment vehicles that allow traders to purchase stocks backed by Bitcoin without holding the assets themselves. There have been Bitcoin futures ETFs available to U.S. investors for some time, but the SEC has been resistant to spot ETFs designed to track the real-time price of Bitcoin.
The journey to this landmark approval began in July 2013 when Cameron and Tyler Winklevoss first proposed the Winklevoss Bitcoin Trust. However, the SEC formally rejected their proposal in March 2017, citing concerns about Bitcoin’s market volatility and potential investor risks. This has set the tone for the rejection of various Bitcoin ETF proposals over the years.
The SEC’s stance on spot Bitcoin ETFs appears to be rooted in concerns about the structure of the cryptocurrency market, including issues such as price discovery, trade execution, liquidity and potential market manipulation. This skepticism became clear in 2018, when the SEC rejected nine applications in one day, including those from ETF specialists such as ProShares.
The departure of SEC Chairman Jay Clayton in 2020 and the naming of Gary Gensler as his successor in January 2021 brought renewed optimism based on Gensler’s deeper understanding of cryptocurrencies and his past opinions.
But it wasn’t smooth sailing for Gensler at the helm of the securities regulator. Just a week ago, one day, CNBC In the interview, the SEC chairman called cryptocurrencies the “wild west” and lamented the hasty non-compliance of industry players.
However, the persistence of various players within the industry, including major financial institutions such as BlackRock, Fidelity, and WisdomTree, continued.
Most recently, potential issuers proposed a cash-only issuance of Bitcoin ETF shares. This is a measure to limit the exposure of businesses to having to handle Bitcoin directly.
Edited by Guillermo Jimenez.
