On the night of January 10th, the United States Securities and Exchange Commission (SEC) expedited its efforts following a mistaken tweet announcing the approval of applications for a spot Bitcoin exchange-traded fund, which initially garnered a reaction from the crypto communities. However, just one day after this critical incident, the SEC officially announced the approval of the first regulated spot Bitcoin ETF applications in the United States.
The Future of ETFs and Bitcoin
Following this historic step, many investors began to eagerly anticipate what the future holds. The approval of spot Bitcoin ETF applications in the US is expected to lead to the adoption of Bitcoin by institutional investors, but industry experts also point out that other factors will come into play.
Yesha Yadav, a law professor and associate dean at Vanderbilt Law School, stated the significance of launching spot Bitcoin ETF products for the cryptocurrency and financial markets:
“In the upcoming period, it will urgently provide a safe way for investors to invest in Bitcoin. ETF products are well-regulated and friendly to individual investors. This should mean that the crypto markets will become much more accessible to investors who might otherwise stay away from a much less regulated crypto market through a spot Bitcoin ETF product.”
The securities regulator may have approved 11 Bitcoin ETF applications on the night of January 11th, including 19-b4 applications from highly reputable institutional players such as Grayscale, BlackRock, Fidelity, WisdomTree, Valkyrie, and other candidates. Leah Wald, CEO of Valkyrie, explained that Valkyrie’s spot Bitcoin ETF product would be offered to US investors through brokerage or investment accounts:
“Any investor will be able to purchase shares of our ETF product, which will be traded on Nasdaq.”
Wald also added that Valkyrie expects over $400 million in asset inflows to the ETF product in the first few weeks of trading:
“We expect to see billions of assets flowing into ETF products just in the first month. Many investors were on the sidelines waiting for such products.”
ETF Process and the Canadian Example
Although it is still too early to accurately predict the performance of the newly launched spot Bitcoin ETF products, Alex Tapscott, author and managing director at Ninepoint Digital Assets Group, mentioned that there could be similarities between US spot Bitcoin ETF products and Canadian spot Bitcoin ETF products. Canada was a pioneer in this area, having given the green light to its first spot Bitcoin ETF product in 2021.
According to Tapscott, Ninepoint Digital Assets Group introduced a spot Bitcoin ETF product to investors in Canada in May 2021. He mentioned that Purpose Investments was the first fund to launch a spot Bitcoin ETF product in the region, and it brought in over a billion dollars in assets in the first month:
“This is an important data point to consider because the US crypto market is 10-20 times larger than the Canadian market when measured by population and investable assets.”
