After months of anticipation, the Securities and Exchange Commission (SEC) has finally given the green light for 11 Bitcoin ETFs to begin trading. Among the approved issuers are industry giants such as BlackRock, Fidelity, Ark 21Shares, and VanEck.
Initially, there were 14 proposals submitted for the spot Bitcoin ETF, but by the start of the new year, that number had been reduced to 11. Late Wednesday, the firms received approval via 19b-4 filings. However, they will not be able to start trading until their S-1 registration documents have been made effective by the SEC.
These S-1 filings provide information for potential investors, such as fees and authorized participants. Interestingly, all 11 approved filers listed Jane Street as one of their participants in the filing.
Authorized participants play a crucial role in ETFs by creating and redeeming shares on behalf of investors. This process involves exchanging shares for a basket of securities or cash that reflects the ETF’s underlying assets.
According to the registration filings, Grayscale’s spot Bitcoin ETF will have the highest fee at 1.5%, while Bitwise will have the lowest fee at 20 basis points. However, Bitwise has announced that it will waive its fee for the first six months or until it reaches $1 billion in assets.
BlackRock, Grayscale and Bitwise have confirmed that their ETFs will begin trading on Thursday, with Fidelity and WisdomTree also reporting that their S-1 statements are now effective.
Market experts are predicting significant inflows, with some projecting record-breaking amounts in the first 24 to 48 hours of trading. Anthony Rousseau, head of brokerage solutions at TradeStation, believes that the inflows could reach into the billions and would be unprecedented in the ETF realm.
Rousseau also emphasized that financial institutions have over $100 trillion in assets under management, and a portion of those funds could potentially be allocated to Bitcoin. However, he cautioned that it may take several months for institutions to incorporate Bitcoin into their investment strategies due to regulatory hurdles.
The long-awaited spot Bitcoin ETF approvals come on the heels of Bitcoin hitting a high of $47,647 after the news broke. However, it has since dipped to $45,700 as short-term traders took profits.
As of the time of writing, Bitcoin is currently trading at $47,133, up 3% in the last 24 hours. Many investors are now awaiting Thursday’s trading session to see how the market will react.