This Month in Crypto: Bitcoin Spot ETF Receives Greenlight

The U.S. Securities and Exchange Commission (SEC) has officially approved 11 spot Bitcoin exchange-traded funds (ETFs) on January 10. The approved applications come from major players like BlackRock, Grayscale, ARK 21Shares, and Bitwise. On the first day of trading, U.S. listed Bitcoin ETFs witnessed an impressive trading volume of approximately AU$7 billion, with the price peaking at approximately AU$73k before experiencing a sell-off.

This regulatory green light marks the first regulated spot Bitcoin ETFs in the U.S., allowing investors direct exposure to Bitcoin’s price through their traditional stockbrokerage accounts. Bitcoin ETFs are game-changers for the crypto market, attracting institutional investors, boosting liquidity, and offering a familiar, regulated way for individuals to invest in Bitcoin. This also legitimizes the digital asset and simplifies access for investors in the U.S. The industry anticipates significant inflows, with estimates ranging from AU$3.6 billion to AU$21 billion in the first year.

Bitwise becomes the first BTC ETF issuer to share its digital wallet address with the public. This move allows anyone to verify the fund’s holdings and flows directly on the blockchain, aligning with bitcoin’s commitment to onchain transparency. Industry experts have applauded this step towards openness in the crypto ecosystem.

The journey to approval had its share of drama. On January 9, the day before the approval, the SEC revealed that its X social media account was briefly accessed by an unknown party who posted a fake message claiming the approval of the Bitcoin ETFs. The SEC quickly clarified that it has not yet approved spot Bitcoin ETFs. The SEC stated they will collaborate with law enforcement to investigate the hack and related conduct. It was later revealed that the false announcement resulted from a SIM swap attack, and the SEC did not have two-factor authentication enabled at the time of the compromise.

In a related development, Vanguard, a major global asset manager, has blocked its clients from buying newly approved Bitcoin ETFs, citing that crypto-related products don’t align with the asset manager’s focus on asset classes. The hashtag #BoycottVanguard gained traction on social media with users expressing their discontent and pledging to withdraw their funds from the asset management giant.

The long-awaited launch of spot Bitcoin ETFs in the U.S. is proving successful with overall positive net inflows. As the crypto market experiences these dynamic shifts and challenges, the overall trajectory remains positive, marked by regulatory advancements, transparency initiatives, and increased investor participation, promising a vibrant and evolving landscape for the digital asset space.

More news stories circulating the block:

• Next Bitcoin halving anticipated in April 2024, continuing the pre-programmed cycle of halving BTC rewards approximately every four years
• Circle, the issuer of USDC, files for an IPO in the United States
• SEC delays decision on BlackRock’s spot Ethereum ETF application
• Terraform Labs, led by Do Kwon, files for Chapter 11 bankruptcy protection
• Coinbase and SEC continue to battle in court on whether securities law applies to crypto listings
• X (formerly Twitter) discontinues support for NFT profile pictures, sparking discussions about the impact on the NFT space
• Sam Bankman-Fried’s parents, move to dismiss FTX’s clawback lawsuit, arguing it capitalises on their relationship with the former CEO
• Japanese e-commerce giant Mercari enables Bitcoin payments from June, further promoting crypto adoption after introducing various crypto-focused products and services on its platform
• Solana Mobile announces the launch of its second crypto smartphone, successor to Saga
• Orbit Chain loses AU$120M in a cross-chain bridge exploit, highlighting vulnerabilities in the platform’s communication and transactions with various blockchains.

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