Long Live The King: Bitcoin ETFs Approved

It’s the moment the crypto currency sector has been waiting for and despite early news attempting to dampen the prospects of a Bitcoin ETF it is now upon us and there are quite a few to choose from which will enable to market to become competitive and continue to drive the need of further Bitcoin.

In a monumental decision that sent shockwaves through the crypto world, the U.S. Securities Exchange Commission has granted approval for 11 spot Bitcoin exchange-traded funds (ETFs). This ground breaking move allows money managers to launch ETFs providing everyday investors with a convenient way to gain exposure to the world's largest crypto currency without the need to own it physically.

The long-anticipated decision marks a significant step towards mainstream acceptance of Bitcoin, potentially making it a staple in retirement accounts and pension plans. Let's delve into the details of this historic announcement and its potential implications.

Long Road To Approval

After more than a decade of waiting, the crypto industry witnessed a pivotal moment on Wednesday as the SEC gave the green light to a diverse array of applicants including major Wall Street players like BlackRock and Franklin Templeton. As well as notable crypto firms. The approved ETFs are set to begin trading immediately opening up new avenues for investors to include Bitcoin in their portfolios.

The journey to this approval has been fraught with challenges. The SEC has rejected over 30 similar applications in the past, citing concerns about market manipulation and fraud in the spot Bitcoin markets.

However, a key turning point occurred last August when Grayscale Investments one of the ETF applicants won a crucial legal battle against the SEC. This victory prompted the SEC to reconsider its stance leading to the recent approvals.

While announcing the approvals, SEC Chair Gary Gensler emphasized that the agency did not endorse or approve Bitcoin itself. Gensler highlighted the myriad risks associated with crypto and urged investors to exercise caution. This cautious approach reflects the SEC's ongoing scrutiny of the crypto industry even as it takes steps towards regulatory clarity.

Dissenting Opinion

Not all SEC commissioners were in Favor of the decision. Commissioner Caroline Crenshaw expressed concerns in a dissenting opinion, calling the agency's actions "unsound and ahistorical." She worried that these products could flood the markets and end up in the retirement accounts of households that can least afford to bear the risks associated with spot Bitcoin markets.

The approval triggered a flurry of activity among the approved issuers, each vying to attract investors with the lowest fees. Major financial institutions like JPMorgan Chase and Goldman Sachs are also entering the fray offering their services to assist money managers in creating and redeeming shares of the new funds. The optimism surrounding these approvals has already contributed to a 164% surge in Bitcoin's price in 2023 and a recent spike above USD 46,000 at the start of 2024.

Price Wars

In the wake of the SEC's expected approval, major players such as BlackRock and ARK 21Shares promptly adjusted their ETF fees to compete for market share. These fee reductions, along with similar moves by other contenders like Bitwise and Valkyrie indicate the fierce competition expected in the ETF market. The battle for market share, coupled with fee reductions adds an interesting dynamic to the post-approval landscape.

Renowned investor and Ark Investment Management CEO Cathie Wood expressed surprise and disappointment at SEC Chair Gensler's statement accusing him of denigrating the entire crypto space. Wood, a prominent figure in disruptive innovation, views this move as consistent with the challenges faced by innovative industries.

The SEC's approval of 11 Bitcoin ETFs marks a significant milestone in the crypto industry's journey towards mainstream acceptance. As these ETFs hit the market investors and industry observers will closely monitor their impact on Bitcoin's price, market dynamics and the broader adoption of crypto currencies.

The regulatory landscape continues to evolve and this development signals a pivotal moment in the ongoing relationship between traditional finance and the world of digital assets. As Bitcoin is now legal we will most likely see a lot more use cases being developed for the digital asset and a lot of people looking for the next token to add to their portfolios.

What are your thoughts on the future of Bitcoin? Will we see it reach USD 100,000 this year or will there be a price correction?

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