It’s here. The U.S. Securities and Exchange Commission (SEC) made an omnibus decision today to approve a host of spot bitcoin ETF applications.
More than 10 years after the first filing for a crypto-based exchange-traded fund, a type of financial product designed to track other assets like commodities and equities, the SEC has decided to approve the first ETFs that follow the spot market price of bitcoin.
Many analysts believe these products, introduced into the market by a host of Wall Street heavyweights including BlackRock, Fidelity and VanEck as well as a number of crypto native firms, could drive significant capital into bitcoin (BTC).
See also: How to Buy a Bitcoin ETF
Larry Fink, the CEO of the world’s largest asset manager BlackRock, has said the firm filed to list a bitcoin ETF last year specifically because there was clear customer demand for something like it. That decision opened the floodgates, with a number of competing applications soon following.
Bitcoin gained over 160% since that moment, based on the idea that if the SEC approved bitcoin ETFs, any number of retail investors and companies would choose to invest in bitcoin. Standard Chartered predicted that upwards of $100 billion could flow into bitcoin ETFs in the U.S. this year.
All of this remains to be seen, but now, with the SEC’s decision to approve 11 of the 13 bitcoin ETF applications, the world will. CoinDesk spoke to a number of experts — traders, executives and analysts — to get their take on what this moment means for the entire crypto industry going forward.
Sergey Nazarov, CEO Chainlink:
“Bitcoin ETF approval has made it clear that traditional financial institutions have a significant role to play in determining how the crypto markets evolve. This was evident when PayPal launched the ability to buy certain cryptocurrencies, and some banks started offering crypto custody. The approval of the spot Bitcoin ETF will lead to an influx of traditional large top-tier financial firms like BlackRock and Fidelity, which will likely actively participate in the crypto markets.”Gavin Michael, CEO Bakkt:
“Today’s SEC approval of a spot BTC ETF represents a significant milestone for the industry, and it is my hope that it signals a new era of regulated crypto products offered by reputable, trusted crypto companies. This ETF approval has the potential to not only accelerate market adoption but also to foster lasting momentum within the industry. As we move forward with more ETF applications, it is essential for ETF providers to collaborate with qualified custodians who have a proven track record in safeguarding digital assets like BTC. This collaborative approach is crucial in reducing risks and creating a secure environment for investors.”
Kristin Smith, CEO Blockchain Association:
“The approval of a Bitcoin ETF adds more pressure on Congress to pass fit-for-purpose legislation for the digital asset ecosystem. Consumer demand is poised to grow exponentially and those consumers, investors, and entrepreneurs deserve clear regulations that address many of the outstanding questions the industry has been urging our elected officials and regulators to answer.”
“If the SEC is anti-crypto, they have shot themselves in the head. If they had just quietly approved the Grayscale ETF application all those many years ago, there would be a few crypto ETFs out there without much fanfare. By delaying as long as they have, they are creating a lot more free publicity for crypto. Also, they appear to be consciously setting it up so that multiple ETFs will start trading at the same time. Whatever the reason, they are invoking the marketing might of the biggest behemoths on Wall Street to start peddling these ETFs. Expect to see lots of advertising pushing various crypto products. If the SEC doesn’t want Mr. and Mrs. Main St to invest their IRAs in crypto, the SEC chose exactly the wrong approach.”
Cami Russo, Founder of The Defiant:
“It’s great that an ETF makes holding Bitcoin easier for institutions, but ultimately we’re packaging bitcoin in a fund, so that intermediaries can sell them to investors, when crypto should be about pushing investors in the opposite direction, and getting them comfortable with non custodial and permission-less solutions.”
Anil Lulla, CEO Delphi Digital:
“Now the process will be straightforward to buy Bitcoin for retirement accounts with much lower fees. Today is the last day ever where the only people incentivized to shill $BTC and crypto are us in the community. Tomorrow, all these ETF issuers will have teams of people incentivized to call our parents/grandparents up to talk about Bitcoin. And the competition will be fierce. Especially in this first year, once a frontrunner is obvious, it will continue to get an outsized portion of inflows into these ETFs. Because of this, the fees will be a race to near zero. You’ve already seen this start to happen.”
Molly White, author of the Citation Needed newsletter:
“Even the bitcoin ETFs are approved and it fails to have significant price impact, I think we will still all be able to celebrate bitcoin achieving an important milestone towards its original goals. Finally, people will be able to turn their money into an anonymous peer-to peer asset outside of government control, to which they own their own keys and thus control completely, without having to involve powerful financial institutions like BlackRock.”
Cory Klippsten, CEO Swan Bitcoin:
“The top-of-funnel for Bitcoin is now represented by the most established and trusted Wall Street institutions which will proceed to spend hundreds of millions of dollars extolling the virtues of Bitcoin, and only Bitcoin. Now that the primary entry points for Bitcoin exposure do not include appeals to gamble with hundreds of dubious crypto tokens, we just might see the end of massive crypto pump-and-dump cycles.”
Lex Sokolin, Managing Partner, Generative Ventures:
I’m excited to see capital flow into the Bitcoin ecosystem at a time where more programmability and functionality is available. From payments companies building on top of Lightning to inscriptions allowing for tokenization of text and images, it’s exciting to see Bitcoin reflecting the broader potential pioneered by Web3. My hope is that the story continues to shift from store of value to global financial infrastructure.Preston Byrne, Partner, Brown Rudnick:
Spot ETF approval is going to prove as consequential for the crypto markets as the advent of securitization in the 1980s was to the credit markets. It’s the first time that there’s been a bridge between TradFi and crypto other than ACH. The space is going to get a lot bigger, very quickly, more quickly than I think most people currently in the space are prepared for.
