Well, buckle up (or so) because it looks like the U.S. Securities and Exchange Commission (SEC) has finally decided to join the crypto party – albeit fashionably late and with a bit of a grumble. In what can only be described as a long-overdue nod to the future (or an admission of the inevitable), the SEC has given the green light to the first U.S.-listed exchange-traded funds (ETFs) to track bitcoin. It’s a “watershed moment,” they say, for the beloved cryptocurrency and the crypto industry at large.
The SEC approved not one, not two, but 11 applications from some big names like BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck. And let’s not forget the little warning label they slapped on: “These products carry risks, folks!”
Most of these shiny new products are expected to hit the markets on Thursday, and issuers are all geared up for what looks like a scramble for market share, akin to a Black Friday sale. Bitcoin ETFs, a decade in the making, are now heralded as game-changers, offering investors the thrill of Bitcoin exposure without the hassle of actually holding it. It’s like being promised a joyride in a Ferrari without ever getting the keys.
Andrew Bond, a senior fintech analyst, is over the moon, saying this is a “huge positive for the institutionalization of bitcoin.” Standard Chartered analysts are throwing around numbers like $50 billion to $100 billion in potential draws this year, while other analysts are playing it cool with a more modest $55 billion over five years prediction. Meanwhile, Bitcoin’s market cap is lounging comfortably over $913 billion, seemingly unimpressed by all this fuss.
But here’s the kicker: the cryptocurrency market reacted to this groundbreaking news with a collective shrug. Bitcoin, perhaps in a bid to stay aloof and mysterious, was up just 3% at $47,300. It seems the market had already sniffed out the SEC’s plans and priced it in. So much for a grand entrance.
Issuers are cutting fees left and right, with some even waiving them entirely for a while – a classic move to attract the short-term speculators who love a good bargain. Companies are also gearing up for an onslaught of online ads and marketing campaigns, because what’s a financial product launch without a little razzle-dazzle?
Then there’s the small matter of a fake SEC post on social media platform X announcing the approval prematurely. The SEC had to scramble to disavow this bit of mischief, but it didn’t dampen the industry’s celebratory mood.
SEC Chair Gary Gensler, known for his skepticism about crypto, made a surprising move by voting for the approval, though he made it clear that this wasn’t an endorsement of Bitcoin, calling it a “speculative, volatile asset.” So, it’s a yes, but not a hug.
The saga of the SEC and crypto continues, but for now, the crypto world has its ETFs. It’s a historic moment, or so they say, but for Bitcoin, it seems to be just another day at the office.
