SEC Approves Spot Bitcoin ETFs in Landmark Decision – The Defiant

In a landmark decision, the US Securities and Exchange Commission (SEC) has approved the launch of the first-ever exchange-traded funds (ETFs) that hold Bitcoin.

“After careful review, the Commission finds that the Proposals are consistent with the Exchange Act and rules and regulations thereunder applicable to a national securities exchange,” according to an approval order posted on the SEC’s website Wednesday.

This decision marks a significant milestone for the cryptocurrency industry, as it opens up new avenues for investors to gain exposure to the world’s most popular digital currency. The investment vehicles can start trading as soon as Thursday.

All 11 issuers applying to list were approved. The full list of issuers is: Grayscale, Bitwise, Hashdex, BlackRock, Valkyrie, ARK, Invesco, VanEck, WisdomTree, Fidelity and Franklin Templeton.

The issuers have been locked in a fee war in the lead up to the SEC’s approval, with many slashing their funds’ costs. BlackRock plans to charge 0.25%, while Bitwise is the cheapest fund with fees at 0.2%.

Previous Rejections

While the SEC had previously rejected spot Bitcoin ETF applications on the basis of how easily the market can be manipulated, the agency said CME’s surveillance can assist in detecting “fraudulent and manipulative acts and practices in the specific context of the Proposals.”

SEC Chair Gary Gensler added in a statement that the agency was compelled to approve the filings after the U.S. Court of Appeals for the District of Columbia held that the Commission “failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP.”

The approval comes after intense discussions between investment management firms, stock exchanges, and the SEC. These discussions centered on finalizing the wording changes in the filings for spot Bitcoin ETFs, a crucial step in gaining regulatory approval.

Prior to this approval, the SEC had only approved Bitcoin futures ETFs. The SEC argued that the surveillance of Bitcoin spot markets was insufficient to prevent fraud and manipulation. However, subsequent discussions and advancements in the industry led to the recognition of the potential benefits and demand for Bitcoin ETFs.