The SEC has accelerated the approval process of 11 spot Bitcoin Exchange-Traded Funds (ETFs). This development initially indicated in a now-inaccessible document on the SEC’s website, marks a significant step in accepting and regulating cryptocurrency assets.
🚨BREAKING🚨
advertisementBitcoin ETFs Likely Approved by the SEC
It certainly looks like the #Bitcoin ETF Approval order had hit the SEC website but the link is no longer working. That said, this document looks accurate to me.https://t.co/NhJueWNPJ0 pic.twitter.com/W0ipnlg3j1
— James Seyffart (@JSeyff) January 10, 2024
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A Surge in Investor Interest Anticipated
The trading world is bracing for the impact of this decision, as substantial inflows of investment are anticipated. Valkyrie Investments projects an inflow of $200 million to $400 million into its ETF alone. Collectively, the market might witness $4 to $5 billion in inflows within the initial weeks.
VanEck forecasts a $1 billion surge in the first few days, growing to $2.4 billion in a quarter. Galaxy Digital expects a $14 billion influx in the first year, while Bitwise projects the market for spot bitcoin ETFs to balloon to around $72 billion in five years.
Bitcoin ETF Preparations: Issuers Line Up Seed Funding
In readiness for this new phase, issuers have lined up seed funding. VanEck leads with a $72.5 million investment in its ETF. Bitwise, with a $500,000 seed, has revised its S-1 form, and Pantera Capital expressed interest in a substantial $200 million investment. BlackRock’s proposed ETF is seeded with $10 million.
This preparatory phase also witnessed a competitive battle over fees. Bitwise set the lowest bar, offering zero fees initially, followed by a 0.2% fee, a reduction from the previous 0.24%. BlackRock proposes a 0.2% fee for the first year or until the fund reaches $5 billion, adjusting to 0.3% thereafter. Fees across other ETFs vary, with some as high as 1.5%.
This decision by the SEC indicates a shift in the regulatory approach towards cryptocurrency. It follows a recent event where the SEC’s Twitter account was compromised, falsely announcing premature approval of bitcoin ETFs. However, the recent official approval reflects the SEC’s evolving stance on digital currencies.
Read Also: Spot Bitcoin ETF: Hashdex Jumps Last Minute Hoops Ahead of Historic Approval
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