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The Journey to Bitcoin ETF Approval

Recently, the Securities and Exchange Commission (SEC) approved exchange traded funds (ETF) that track the price of Bitcoin. This has been a long journey of rejection due to many worries including the possibility of market manipulation. Here is how we got to approval:

In the early days of Bitcoin, it was traced to the use for illegal activities on the black market. However, it soon started to gain traction for the use of an alternative currency as opposed to regular currency, such as the dollar, in the early 2010s. By 2017, the SEC had rejected the proposal for a Bitcoin ETF, setting the tone for future rejections. 

By 2021, the SEC had approved ETFs that hold Bitcoin futures, yet still rejected those directly invested in Bitcoin. This led to Grayscale, a crypto asset manager, suing the SEC, challenging the distinction between types of ETFs. 

By late 2023, a court ruled in favor of Grayscale, citing the SEC did not explain their decision on types of ETFs clearly. This was a win everywhere for the crypto currency community. 

Leading to us today, the first eleven Bitcoin ETFs have started trading, attracting nearly one billion dollars. BlackRock and Fidelity have led the charge, with another $1.2 billion from Grayscale. Many firms are optimistic about the future of the ETF, while others remain cautious. 

Despite some outflows, Grayscale remains strong with their position into the ETF. Analysts believe in continued growth for the new spot Bitcoin ETFs, which witnessed $16.6 billion in trading volume during the initial week.

The available investment opportunities provide a way for easy entry into the cryptocurrency realm, minimizing the risk. Contrary to the belief that you may be “late to the game”, this is only the beginning. Only time will tell the outcome for crypto.

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