Bitcoin ETFs are approved by the US SEC, marking a significant milestone for the cryptocurrency market

In a landmark decision for the biggest cryptocurrency in the world and the larger cryptocurrency market, the U.S. securities commission on January 10, 2024 approved the very first exchange traded funds (ETFs) based on bitcoin, which will be listed in the country.

Bitcoin ETFs approved by the US Securities and Exchange Commission

Despite concerns from certain officials and investor advocates that the products contained risks, the Securities and Exchange Commission said that it granted 11 applications, including those from Fidelity, BlackRock, Ark Investments/21Shares, VanEck and Invesco.

According to issuers, the majority of the securities are anticipated to go live on January 11, 2024, sparking a competitive race for market share.

The ETFs, which have been in development for over a decade, are revolutionary for bitcoin because they provide investors the exposure to the biggest cryptocurrency in the world without requiring them to hold it directly. They provide the scandal-riddled cryptocurrency industry a significant boost.

"It's a big plus for the institutionalization of bitcoin as an asset class," senior fintech analyst and managing director at Rosenblatt Securities, Andrew Bond remarked.

Analysts at Standard Chartered predicted last week that the ETFs might bring in $50 billion to $100 billion alone this year. According to other forecasts, during a five-year period, inflows will be approximately $55 billion.

According to CoinGecko, Bitcoin's overall market capitalization was over $913 billion on Wednesday. According to the Investment Company Institute, the total net assets of U.S. exchange-traded funds (ETFs) as of December 2022 were $6.5 trillion.

Over the expectation of an ETF, the Bitcoin has surged by almost 70% in recent months. Last week, the cryptocurrency reached its highest price point since March 2022.

Bottomline

According to economists, fees and liquidity will be the primary determinants of success in the fight for inflows. Some issuers, like BlackRock and Ark/21Shares, reduced their projected fees in fresh filings this week. These fees can range between 0.2% to 1.5%, and several firms give fee waivers in full for a specific period of time. Liquidity may be particularly crucial for short-term speculators who want to enter and exit the products.

Corporations anticipate a surge in online marketing and advertising. Some issuers, notably Bitwise and VanEck, have released commercials pitching bitcoin as a means of investment.