Security Token Exchange

For the first time in the US, the long-awaited spot Bitcoin exchange-traded funds (ETFs) received approval from the US Securities and Exchange Commission (SEC). Bitcoin’s price saw no notable gains on the news, but crypto-related stocks like Coinbase (NASDAQ: COIN), Marathon Digital (NASDAQ: MARA), and Bitcoin Depot (NASDAQ: BTM) surged higher in premarket trading. 

SEC Approves 11 Spot Bitcoin ETF Applications

On Wednesday, the US SEC approved the first group of spot Bitcoin ETFs in a game-changing development for the broader crypto landscape.

Specifically, the securities regulator gave a green light for 11 applications, including those from traditional finance giants like BlackRock, VanEck, Invesco, and Fidelity. According to issuers, most funds are set to begin trading on Thursday, leading to an intense rivalry for market share. 

The spot ETF approvals are seen as a significant advancement for cryptocurrencies, enhancing their potential to enter mainstream finance. Spot ETFs allow investors to gain exposure to an asset without directly holding it, thereby mitigating certain risks and making BTC a more appealing investment for institutions. Those risks include creating crypto wallets and accounts with cryptocurrency exchanges, some of which have demonstrated vulnerability to hacks and mismanagement. 

“It’s a huge positive for the institutionalization of bitcoin as an asset class.”

said Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities.

Interestingly, Bitcoin showed no noteworthy price reaction to the approval. The cryptocurrency is down 0.2% in the past 24 hours. Despite substantial gains in the past year linked to events leading to approval, there’s now speculation about whether these factors are already reflected in the current price. 

However, the influx of new funds could significantly impact BTC’s price in the future. Earlier in the week, Standard Chartered said ETFs could draw up to $100 billion in 2024 alone. Other analysts said inflows will amount to $55 billion over five years. 

Crypto Stocks Surge on Bitcoin ETF Approval News

Though Bitcoin has not exhibited gains on the approval reports, crypto-related stocks have.

Shares of Coinbase, the crypto exchange that witnessed colossal gains in the past year, rose more than 4% in premarket trading Thursday. Marathon Digital’s stock climbed 5.03%, while shares of Canaan, a China-based blockchain server provider, surged 11.21%.

Bitcoin Depot, the largest BTC ATM company, soared 13.26% in the market pre-open. Crypto and stocks trading app Robinhood rose 3.79%. 

With the spot Bitcoin ETF officially approved, where do you see the world’s biggest cryptocurrency trading at the end of 2024? Let us know in the comments below. 

About the author

Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.