The U.S. Securities and Exchange Commission (SEC) has formally approved multiple spot Bitcoin exchange-traded funds (ETFs), following a brief false start on January 9. This historic ruling is a turning point for the cryptocurrency market and makes way for the first regulated investment products that offer direct exposure to the price of Bitcoin.

As of January 10, confusion initially resulted from an Error 404 being presented for the approved document link on the SEC website. But the SEC’s file approving spot Bitcoin ETFs is now available via an alternate URL, indicating the regulatory go-ahead.

The SEC’s Historic Approval: Opening Up Direct Access to Bitcoin

The SEC’s approval of 19b-4 applications from Franklin Templeton, ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, and Hashdex ushers in a new era for the cryptocurrency market. This ruling authorizes regulatory modifications that permit spot Bitcoin ETFs to be listed and traded on the relevant exchanges.

Now, investors may directly profit from fluctuations in the price of Bitcoin without having to purchase the cryptocurrency or worry about maintaining self-custody. Investors can engage in the cryptocurrency market using conventional financial instruments by buying shares in exchange-traded funds (ETFs) that use Bitcoin as the underlying asset.

A Decade-Long Journey: The Development of Bitcoin ETFs by the SEC

The Winklevoss twins first applied for SEC clearance of the Winklevoss Bitcoin Trust in 2013, over ten years ago, and now this historic decision has been made. Because of worries about potential fraud and market manipulation, the SEC routinely rejected previous plans for a spot Bitcoin ETF. But in August 2023, a court decision reversed the SEC’s decision to reject Grayscale’s application, compelling the agency to reconsider its position.

Now that the spot Bitcoin ETFs have been approved, market analysts expect big changes in the market and are keeping a careful eye on when ETF trading will start. According to Galaxy Research’s head of digital, Alex Thorn, inflows into spot Bitcoin ETFs might top $14 billion in the first year. Global fund manager VanEck predicts that in the first quarter of 2024, spot Bitcoin products will bring in about $2.4 billion.

Fee Schedules Disclosed: A Competitive Environment

In their final modified S-1 and S-3 filings, eight issuers disclosed the fees they plan to charge for their individual Bitcoin ETFs on January 8. Until the fund’s assets under management (AUM) reach $5 billion, BlackRock, the biggest asset manager in the world, intends to charge 0.2% in fees. VanEck and Ark 21Shares are the next in line, both at 0.24%.

Unlike other offerings, Ark 21Shares waives all costs for the first six months or until the product’s AUM hits $1 billion. With the highest charge rate of 1.5% at the moment, Grayscale is still a major player in the Bitcoin ETF market.

Market players excitedly await the start of spot Bitcoin ETF trading as the sector welcomes these legal advancements, expecting greater market participation and institutional involvement in the cryptocurrency area.