April 12, 2024

SEC Approves Bitcoin ETF Proposals — For Real This Time. First Trading Day Closes.

The Securities and Exchange Commission late Wednesday finally approved a slew of spot bitcoin ETFs following months of anticipation. Bitcoin pared its gains Thursday after rallying to $49,000 in the morning following the ETF launch. Meanwhile, many of the newly-launched bitcoin ETFs lost ground in their first trading day.


Bitcoin ETF Green Light

The SEC gave the green light to 11 issuers that applied for bitcoin exchange-traded funds in the first wave of approvals. The filing listed ETFs from ARK Invest (ARKK), BlackRock (BLK), VanEck, WisdomTree, Fidelity, Invesco, Franklin, Hashdex and Valkyrie. Grayscale received approval to uplist GBTC to the NYSE, The Block’s Frank Chaparro reported.

The news comes just hours after the Chicago Board Options Exchange approved all six of its BTC ETF applications.

The approval means the bitcoin ETFs will start trading Thursday morning.  And excitement is running high as many industry experts predict spot bitcoin ETFs will draw a wave of institutional investment.

“A spot bitcoin ETF marks the end of crypto as a ‘novel’ asset class – and the beginning of a world where it can be part of every portfolio,” Nathan McCauley, CEO and co-founder of institutional crypto unicorn Anchorage Digital wrote to IBD. “SEC approval opens the floodgates for trillions of dollars to safely flow into the digital asset ecosystem via a regulated and accessible wrapper that suits consumers and institutions of all types.”

The issuers disclosed their planned fees for the ETFs in their updated regulatory filings on Jan. 9 and 10, which range from 0.2% to 1.5% excluding waivers.

Proposed Bitcoin ETF fees as of Jan. 10 (Source: Bloomberg)
NameTickerIssuerFee (after waiver)Waiver DetailsExchange
ARK 21Shares Bitcoin ETFARKBARK Invest & 21Shares0% (0.21%)6 months or $1 billionCBOE
Bitwise Bitcoin ETP TrustBITBBitwise0% (0.20%)6 months or $1 billionNYSE
Fidelity Wise Origin Bitcoin TrustFBTCFidelity0% (0.25%)Until July 31, 2024CBOE
Franklin Bitcoin ETFEZBCFranklin0.29%n/aCBOE
Grayscale Bitcoin Trust (conversion)GBTCGrayscale1.50%n/aNYSE
Hashdex Bitcoin ETFDEFIHashdex0.90%n/aNYSE
Invesco Galaxy Bitcoin ETFBTCOInvesco & Galaxy0% (0.39%)6 months or $5 billionCBOE
iShares Bitcoin TrustIBITBlackRock0.12% (0.25%)12 months or $5 billionNasdaq
Valkyrie Bitcoin FundBRRRValkyrie0% (0.49%)3 monthsNasdaq
VanEck Bitcoin TrustHODLVanEck0.25%n/aCBOE
WisdomTree Bitcoin TrustBTCWWisdomTree0% (0.3%)6 months or $1 billionCBOE

Elsewhere, Charles Schwab (SCHW) announced early Thursday that ETFs were available on its platform, a public relations rep told IBD. However, some brokers including Vanguard and Merrill Lynch have opted against offering bitcoin ETFs, the Wall Street Journal reported.

Bitcoin Price Reacts

Bitcoin retreated back near $46,400 late Thursday after rallying to $49,000 in the morning – its highest level since December 2021. The crypto traded $45,700 late Wednesday shortly after the SEC announcement. The crypto fell near $45,500 Wednesday following the Cboe approval news after recovering to around $46,000 intraday.

GBTC ticked up 0.5% Thursday while DEFI climbed 1.5%.

Just ahead of Thursday’s close, the ARK 21Shares Bitcoin ETF (ARKB) was down 6%. Franklin Bitcoin ETF (EZBC) and Valkyrie Bitcoin Fund (BRRR) were off more than 5% apiece. The Fidelity Wise Origin Bitcoin Fund (FBTC), Invesco Galaxy Bitcoin ETF (BTCO), iShares Bitcoin Trust (IBIT), Vaneck Bitcoin Trust ETF (HODL) and WisdomTree Bitcoin ETF (BTCW) also lost ground during the day.

The reverse lower is unsurprising as some experts such as ARK Invest CEO Cathie Wood expect some profit-taking on the ETF news.

“I would chalk up any market activity that’s happening today to the machinery of ETF production doing its thing, and making sure that these billions of dollars of new ETFs are properly hedged and traded,” Andy Baehr, managing director at CoinDesk Indices, told IBD.

Bitcoin rallied to 20-month highs above $45,000 by the end of 2023 from around $27,000 in September as ETF anticipation mounted.

False Announcement

The official news comes after the SEC’s X/Twitter account was compromised Tuesday and posted a fake announcement that all the bitcoin ETF applications were approved.

“The @SECGov twitter account was compromised, and an unauthorized tweet was posted,” SEC Chair Gary Gensler wrote on X shortly after the fake announcement. “The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.”

The official SEC social media account confirmed Gensler’s statement after deleting the unauthorized post.

“Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges,” the now-deleted post read. “The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection.”

Bitcoin quickly shot up to $47,900 around 4:30 p.m. ET Wednesday following the social media post before dropping as low as $44,385 overnight Tuesday.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison


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