Finally, the ETF industry can let out a sigh of relief and revel in the fact that spot bitcoin ETFs will be available to U.S. market participants. After what felt like an eternity to ETF nerds and cryptocurrency bulls alike, the Securities and Exchange Commission on Wednesday gave the green light for 11 spot bitcoin ETFs to list in the U.S.
It’s widely viewed as a seminal moment for crypto and ETFs, and one that could not only drive bitcoin prices over the long term, but one that could prompt investors to take a closer look at crypto-adjacent assets. Those include the Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC).
Both ETFs currently feature the Grayscale Bitcoin Trust (GBTC) as their largest holding, which is relevant on many levels, not the least of which is the point that the SEC granted Grayscale permission to convert GBTC to an ETF from its current structure as an index fund. That provides BLKC and SATO with direct exposure to the spot bitcoin ETF asset class.
Spot Bitcoin Could Bring Multiple Catalysts
In addition to the obvious catalyst of GBTC ownership, BLKC and SATO could be subject to other tailwinds derived from spot bitcoin ETF approval. Some experts believe there are an array of such positive factors to consider.
“The approval of Bitcoin ETFs represents a resounding institutional validation of the cryptocurrency, marking a departure from its initial reputation as a speculative and volatile asset,” noted deVere Group CEO Nigel Green. “The approval of Bitcoin ETFs represents a resounding institutional validation of the cryptocurrency, marking a departure from its initial reputation as a speculative and volatile asset.”
Green echoed the sentiment of other ETF industry observers. He pointed out that spot bitcoin ETFs are likely to be prolific asset gatherers. It’s possible that some, particularly those with the lowest fees, could rapidly become $1 billion-plus products. That could drive significant capital into bitcoin.
Additionally, spot bitcoin ETFs increase accessibility to the largest digital currency, while potentially serving to bring them further into the mainstream of financial markets.
“Increased accessibility is likely to contribute to higher liquidity in the Bitcoin market, reducing price volatility and enhancing the overall stability of the cryptocurrency,” added Green.
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VettaFi LLC (“VettaFi”) is the index provider for SATO and BLKC, for which it receives an index licensing fee. However, SATO and BLKC are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of SATO and BLKC.