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Bitcoin ETF approved by the SEC on historic day for crypto
After the Winklevoss twins proposed the very first Bitcoin ETF 2013, U.S. regulators finally yielded to the overwhelming desire for a crypto-based spot fund.
After a decade-long battle with the Securities and Exchange Commission (SEC), the day has arrived. Spot Bitcoin ETFs have finally been approved for trading in the United States. The landmark decision is the greatest sign of digital asset adoption to date, with traditional finance (TradFi) well and truly entrenched in the crypto market. The 11 approved funds are set to start trading on the 12th of January, with more likely to come throughout 2024.
The market has been anticipating this moment for months, as the price of Bitcoin has sky-rocketed to 20-month highs and optimism rages that the crypto winter might finally be over.
One would like to say this announcement is the final nail in the coffin of crypto non-believers – demonstrating once and for all that Bitcoin is here to stay. Even long-time haters like Jim Cramer have finally come around (although this may not exactly be a good thing given his track record…)
SEC Chairman, Gary Gensler (Chair of the SEC) released a somewhat subdued statement after what is considered huge win for the crypto market. Gensler made clear his position on Bitcoin, making remarks about crypto’s less desirable uses.
“We did not approve or endorse Bitcoin…[it] is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion and terrorist financing.”
In a surprising turn of events, however, it has been revealed that Gensler voted in favour of the ETF, whereas some of his commissioner counterpoints did not.
The reaction from the crypto community was mostly filled with raucous optimism rampaging through the cryptosphere on this milestone day.
For a deep dive into what the impact of the ETF could be, click here.
Altcoins surge following ETF announcement
Ethereum leads the way as a giant list of prominent altcoins are in the green following the ETF announcement.
Excitement has blossomed among the crypto community as a Bitcoin ETF was approved by U.S. regulators. Although BTC itself was not on the invite list for the celebrations in terms of gains, several big-name projects in the top 100 cryptocurrencies have posted 10+% gains. This naturally begs the question – is altcoin season finally back on the menu?
The biggest winners after the Bitcoin ETF announcement were nearly all related to Ethereum. Why? Well, after the market boosted the price of BTC by nearly 100% in the lead-up to the fund approval, it appears investors have turned their sight to the next coin slated for a spot ETF – ETH.
The Ethereum price is up about 10% in the past 24 hours, but some of its associated coins have experienced even more impressive gains. Rocket Pool, a staking service for Ether, was the best performer in the aftermath, surging 21%. Ethereum Classic (a hard fork of the DeFi network) was close behind at 21%, with Layer 2 solution Arbitrum up about 18.5%
In general, altcoins all across the board have enjoyed a terrific past day, with some of the more popular projects like Polygon, Polkadot, Cardano and Avalanche all jumping 10% or more.
The meme coin BONK, has rebounded in leaps and bounds over the past week. After falling more than 70% from its mid-December all-time high, the dog-based cryptocurrency has sky-rocketed 35% in less than a week.
Bloomberg forecasts $4 billion inflows into Bitcoin ETF on first trading day
BlackRock’s fund may rake in $2 billion alone, as Bloomberg predicts a $50-billion-dollar industry within two years.
Eleven Bitcoin spot ETFs are set to begin trading on the 12th of January – and several analysts believe they will kick off with a bang. While previous, futures-based funds on traditional markets (think Grayscale’s Bitcoin Trust) didn’t set the world on fire, the hype around spot crypto ETFs has built to a fever pitch.
Bloomberg has been closely following the drama-filled process of Bitcoin ETF approvals, dedicating significant time and analysis to its potential impact. So far, most of their predictions have been spot on – and the team’s latest projection spells trouble for the anti-crypto crowd.
Bloomberg Intelligence’s lead analyst, Eric Balchunas, suggested that up to $4 billion dollars will fly into the digital asset sector in the very first day of trading – a figure with the potential to break inflow records. Financial giants BlackRock, who are releasing the iShares Bitcoin Trust ETF, may be responsible for half of this figure themselves, which would also smash first-day flows for a single fund. This will form part of a $50 billion+ market that Bloomberg believes will form over the next two years of trading.
In immediate response to ETF approval, Bitcoin’s price movements were relatively subdued – remaining within 1% of its price pre-announcement. However, the market may be loading up on altcoins as they wait and see how the funds actually perform on their first day of trading. Another reason could be that numerous sell-the-news calls may have scared off potential investors looking to jump in. A record-breaking return from spot ETFs may restart the hype around Bitcoin as we lead into mid-2024’s halving event.
