SEC Approves First Spot Bitcoin Funds, Sparking a Wave of Bitcoin ETF Approvals; BTC Is Indifferent As ETH Rises

While issuers are lining up to cash in on the SEC’s approval of spot Bitcoin ETFs, the price of Bitcoin has remained relatively unchanged, going against expectations. Photo courtesy of DREAM DIVE and Adobe Stock.

 

 

One more piece of good news: the first spot Bitcoin ETFs in the US have finally been approved by the SEC. A new era in cryptocurrency investment has begun with this historic ruling, which unleashes a deluge of activity for eleven eager Bitcoin spot ETF providers. Unexpectedly, the price of Bitcoin did not even move an inch, climbing by a mere 1% in the hours following the news was announced.

 

 

When the SEC website went down not long after the announcement, there was some initial doubt about the validity of the approvals. The recent hacking of the SEC’s official Twitter account only served to heighten these concerns. The website, however, quickly recovered and was back up and operating, proving that the approval for the spot Bitcoin ETFs was legitimate.

 

 

After years of waiting, the Bitcoin ETF was finally approved. Now, millions of investors who prefer the familiar ETF wrapper will have much easier access to Bitcoin investing through these new spot funds. Bitcoin is no longer limited to direct purchases or futures-based funds; investors can now obtain exposure in their standard brokerage accounts.

 

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Issuers of Bitcoin ETFs Compete Increasingly to Offer the Finest Terms

 

 

The floodgates have been opened, and now US ETF providers are racing to provide the most alluring fee structures to entice investors. A plethora of well-known names are engaged in a fierce price war, offering reduced rates, free trials, and other perks to entice customers away from their competitors.

 

Zero fees for the first six months were announced by ARK Invest in partnership with 21Shares. Bitwise and Invesco both entered the fee war by offering 0% on their initial $5 billion worth of assets. This pricing war has only just begun, with over a dozen rivals.

 

 

 

 

 

 

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Ethereum Outperforms Following the Spot ETF Approval of Bitcoin ETFs

 

 

As expected, Ethereum’s price reacted more sharply to the announcement of Bitcoin ETF acceptance than Bitcoin’s price, which has hardly changed. With a price increase of more than 3.5 percent following the SEC statement, Ethereum has surpassed Bitcoin in performance, surpassing the $2,500 milestone.

 

It would appear that the notion that Ethereum ETFs have a decent probability of getting approved, given the approval of Bitcoin ETFs, is driving the tremendous interest in Ethereum among investors. While Ethereum’s ETF approval is still a “buy the rumour” story, a powerful “sell the news” narrative may be dragging down BTC’s price.

 

 

 

 

 

What Effect Could Spot Bitcoin ETF Approval Have on the Market?

 

 

 

Launching spot Bitcoin ETFs removes hurdles like exchanges and wallets, making crypto investment accessible to the public in the US. Anyone with a regular brokerage account can acquire shares. However, it is still unclear how the funds will follow Bitcoin’s value.

 

Bitcoin futures exchange-traded funds have done “fairly well” in tracking the price, says Simeon Hyman of ProShares. The major concern is whether spot ETFs are able to achieve the same level of correlation.

 

Still, professionals are sure it will have a positive effect. There has been prior evidence of possible influence from incidents involving Bitcoin ETFs. The price of Bitcoin skyrocketed from around $10,000 to more than $40,000 in a matter of months after ProShares introduced the initial Bitcoin futures ETF in October 2021.

 

We anticipate much larger inflows this time around from the long-awaited spot ETFs. Capital inflows might reach $20 billion in the first year, according to Reggie Brown, GTS co-global head of ETF trading and sales.

 

According to JAN3’s Samson Mow, Bitcoin’s value might soar to $160,000 or perhaps $1 million after the launches. Similarly, Anthony Scaramucci anticipates quick gains, predicting that Bitcoin might reach $330,000 following the approval.

 

Evidently, the SEC is content with the developing cryptocurrency business and the structure of the Bitcoin market, since their clearance has now been solidified. More institutional investors will certainly embrace digital assets when they give their approval. The approval of a Bitcoin ETF by regulators is a long-awaited confirmation for bitcoin proponents.

 

 

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