The SEC approves Spot Bitcoin ETFs: Now What?

TL;DR

The SEC approves the applications of 11 ETFs which track the market price of bitcoin. 

• The 11 spot ETFs which gained approval launch one day after approval.

• Bitcoin’s price surges, then steadily cools.

• A race to offer the lowest ETF fees and attract the most investors kicks off.

• Investors who don't want to hold BTC itself, now have a wider range of choices at competitive prices.

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On January 10th, 2024, the U.S. Securities and Exchange Commission (SEC) approved the applications of 11 spot bitcoin exchange-traded funds (ETFs).  To explain how it works, these ETFs allow you to buy shares in a fund that owns Bitcoin. The fund holds the Bitcoin in secure storage and mirrors the market price movements.  So, when Bitcoin's price goes up, so does the value of your ETF shares.

Who got approved? 

• ARK 21Shares Bitcoin ETF (ARKB)

• Bitwise Bitcoin ETF (BITB)

• Fidelity Wise Origin Bitcoin Trust (FBTC)

• Franklin Bitcoin ETF (EZBC)

• Grayscale Bitcoin Trust (GBTC)

• Hashdex Bitcoin ETF (DEFI)

• Invesco Galaxy Bitcoin ETF (BTCO)

• iShares Bitcoin Trust (IBIT)

• Valkyrie Bitcoin Fund (BRRR)

• VanEck Bitcoin Trust (HODL)

• WisdomTree Bitcoin Fund (BTCW)

Source: Investopedia

In the months leading up to the SEC’s decision, with all the hype surrounding it, the price of bitcoin surged, from over $26k on October 11th, 2023, to over $47k on January 10th, 2024.  It didn't stop there - on January 11th, the first day of spot BTC ETF trading, the price of bitcoin shot up to over $48,000, with trading volumes of over $62 billion in the first 24hrs.

Since then, the price of bitcoin has settled with highs in the range of 46k down to around 41k.  This is likely due to the hype and excitement settling down and also large holders of bitcoin choosing to sell some of their holdings while the prices were on a high.

Now what?

Now investors have the opportunity to easily buy or sell spot BTC ETFs through their trusted online broker, just as you would any other ETF. 

The competition among ETF issuers is fierce, as they try to entice investors with lower management fees currently ranging from 0.2% to 1.5%.  ETFs, such as ARKB are even offering no fees for up to 6 months, or until the fund reaches $1 billion in assets. 

So investors who want to add BTC to their portfolio without having to hold bitcoin itself, now have a wider range of choices and ways to invest.  The cost of entry is highly competitive and buying and selling in and out of BTC has now become a whole lot easier!