Milestone moment, spot Bitcoin ETF approved, BTC moves towards mainstream

Written by: Mary Liu, BitpushNews

"It takes ten years to sharpen a sword." On the afternoon of January 10, 2024, Eastern Time, the U.S. SEC officially announced its approval of the listing and trading of spot Bitcoin ETFs. This is a milestone moment and represents the most important step for the crypto asset class to gain mainstream adoption. step.

The only 11 approved spot Bitcoin ETFs are: Bitwise, Grayscale, Hashdex, BlackRock, Valkyrie, ARk&21Share, Invesco, VanEck, WisdomTree, Fidelity, and Franklin Templeton.

BinanceCEO Richard Teng posted on X: "Today will be loadedcryptocurrencyhistory. "

More than ten years of "Long March"

The crypto industry has been waiting for this moment for more than a decade. Brothers Cameron and Tyler Winklevoss applied to launch the Winklevoss Bitcoin Trust Fund on July 1, 2013, when the price of Bitcoin was about $100.

Since then, the US SEC has rejected more than 30 similar applications on the grounds that these products are susceptible to market manipulation.

In June last year, BlackRock, the world's largest money management company, applied for a spot Bitcoin ETF. This was a critical moment of change. The entry of asset management giants set off a wave of institutional participation.

Another important development occurred last August when Grayscale Investments, one of the ETF applicants, won a major legal victory against the SEC. Grayscale sued the SEC in 2022 because the company was not allowed to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.

The judge’s core argument is that the SEC has approved holding Bitcoin futurescontractofexchangetrading products, and therefore "acts in an arbitrary and capricious manner" by refusing to convert. This forced the SEC to reconsider Grayscale and other issuers’ spot Bitcoin ETF applications.

As things turned around, various signs of approval began to appear. Issuers continued to meet/discuss with the SEC to modify the filing. The SEC held discussions with the issuers for several months on whether to use cash or physical models to create, and finally each issuer The parties agreed to adopt the SEC's plan - cash creation. After this key point of contention is resolved, the standard procedure will follow. The market has responded enthusiastically. The SEC emphasized in today’s official announcement document: “It has accelerated the approval of 11 spot Bitcoin ETF proposals.”

Crypto market reaction

Bitcoin briefly fluctuated after news of the approval was announced, before rising above $47,000.Xiaobai Navigationreached $47,500.

TradingView data shows that the stock price of Grayscale Bitcoin Trust (GBTC), the largest closed-end Bitcoin fund currently approved for conversion to ETFs, soared to $40, the highest price since December 2021.

Ethereum gained 11%, surpassing $2,500 for the first time in 20 months, as attention turned to the possibility of approval of a spot Ethereum ETF.

Historically, the launch of Bitcoin-related products has often stimulated significant increases in BTC prices.

The United States launched its first Bitcoin futures in 2017contract, then approved the first Bitcoin futures ETF in 2021. In the year following its launch, BTC prices soared and then fell sharply.

Ophelia Snyder, co-founder of crypto investment product publisher 21Shares, told CoinDesk that while the ETFs could trade as early as Thursday, the broader impact of these products will be felt in a few months.

cryptocurrency对冲基金 Alt Tab Capital 投资者关系主管 Michael Silberberg 表示，预计「随着资本将从新型机构买家流向cryptocurrency市场，价格将会出现泡沫」。

Bartosz Lipiski, CEO of cryptocurrency trading platform Cube.Exchange, noted that Ethereum outperformed Bitcoin following the news, suggesting that altcoins will also benefit.

Lipiski said in the report: "It has been a while since ETH's single-day increase reached 10%, so this number is quite impressive. Looking forward, as the supply becomes more scarce and these 11 ETFs begin to eat up a large amount of supply, Bitcoin will eventually will resume higher, which makes sense. As Bitcoin may become harder to buy, othersTokenStart filling in the gaps. ETH, solana (SOL), Polygon (MATIC) and others may gain momentum”.

How much money will the spot Bitcoin ETF bring?

In the short term, VanEck research analysts predict that the spot Bitcoin ETF could see $1 billion in inflows within the first few days of its launch, and about $2.4 billion in inflows in a quarter.

Hashdex chief investment officer Samir Kerbage said in a webinar earlier this month that he also expected $1 billion to $10 billion to flow into such products in the first weeks and months. He added that the size of spot Bitcoin ETFs will “exponentially grow” in the coming years. "People may be overestimating the short-term impact of a U.S.-approved Bitcoin ETF and underestimating the long-term impact," he said.

Matt Hougan, chief investment officer of Bitwise, said in a webinar in August that his company estimated that a U.S. spot Bitcoin ETF could attract $55 billion in net flows within its first five years on the market.

Galaxy Digital research associate Charles Yu said in an October report that $14.4 billion is expected to flow into spot Bitcoin ETFs in the first year, which could lead to a 74% increase in Bitcoin prices within 12 months of approval.

Gautam Chhugani, managing director of research at Alliance Bernstein, believes that his team estimates that such financial products will receive investment flows of $10 billion or more by the end of 2024, and "hundreds of billions" within two years.

Other experts expect some volatility in the coming days. Spot Bitcoin ETFs are expected to track underlying Bitcoin, but these ETFs are larger and will see significant new AUM investments coming in within a day or two of trading.

Stuart Barton, co-founder of Volatility Shares, said in an interview with Bloomberg: "We may see ETFs struggle to gain exposure in the Bitcoin market. We know that the Bitcoin market may typically reach $10-20 billion per day. If the first With $40-50 billion pouring into these ETFs every day, it may be difficult for financial advisors to obtain this much Bitcoin.”

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