Over a decade has passed since the initial filing for a spot bitcoin ETF, and now, it seems, that moment has finally arrived. The U.S. Securities and Exchange Commission has given the green light to all 11 applications from spot bitcoin ETF issuers, a decision that could have significant implications for the world of crypto. By making it easier for institutional investors and consumers alike to invest in the largest digital asset, this approval could mark a major turning point for the industry.
“The ETF is step one to bringing tried and true financial products and structures from Wall Street to digital assets that people understand,” stated Muneeb Ali, CEO of Trust Machines, in an interview with TechCrunch.
The 11 approved issuers are a mix of well-known names in the financial world and emerging players in the crypto space. The list includes BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, ARK 21Shares Bitcoin ETF, Bitwise Bitcoin ETP Trust, WisdomTree Bitcoin Fund, Fidelity Wise Origin Bitcoin Trust, VanEck Bitcoin Trust, Invesco Galaxy Bitcoin ETF, Valkyrie Bitcoin Fund, Hashdex Bitcoin ETF, and Franklin Bitcoin ETF.
Six of the ETFs will be listed on the Chicago Board Options Exchange (CBOE), three will be on the New York Stock Exchange (NYSE), and two will trade on Nasdaq. The fees for these ETFs range from as low as 0.2% to as high as 1.5%, with some issuers offering introductory waivers for a limited time.
- BlackRock and ARK are offering zero fees (aside from BlackRock at 0.12%)
- WisdomTree’s fees are as low as 0.2%
- Fidelity’s fees will range from 0.29% to 0.4%
- Valkyrie’s fees will be 0.5%
- Invesco and Galaxy are offering zero fees for a limited time
So, what exactly is a spot-based ETF? In simple terms, it allows investors to indirectly own an asset by purchasing shares of a fund that owns that asset, instead of directly owning it. In contrast, futures-based ETFs use contracts that allow investors to buy or sell an asset at a predetermined price in the future. This type of ETF also allows investors to own the asset indirectly through the fund they purchased.
The only crypto-based ETFs that were previously approved in the U.S. were tied to futures contracts with bitcoin and ethereum and were traded on the Chicago Mercantile Exchange. However, in 2021, the first bitcoin-linked futures ETF, BITO, was launched and saw significant demand in its first year. It has since become one of the largest and most traded crypto ETFs, according to ProShares data.
Aside from providing a new investment option for consumers, ETFs can also lend legitimacy to the crypto space and increase adoption from investors who previously did not have access to these assets. According to John Wu, president of Ava Labs, the approval of these ETFs could bring mainstream legitimization, protection, and distribution to the industry, marking a watershed moment for crypto.
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