A 10-year journey concludes in historic win for crypto

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Over a decade after the first application was filed, the crypto industry finally witnessed the Securities and Exchange Commission (SEC) approve the first regulated spot Bitcoin exchange-traded fund (ETF) in the United States. 

The spot in Bitcoin ETF approval was a historic milestone for crypto, but the road was not smooth. It all started on July 1, 2013, when Gemini co-founders Cameron and Tyler Winklevoss filed the first application for a spot Bitcoin ETF in the U.S. However, despite the twins’ efforts and a back-and-forth with the SEC, the agency eventually rejected the application in 2017. The decision led finance and media pundits to declare that Bitcoin was not ready for the mainstream. 

In the same year, the Grayscale Bitcoin Trust (GBTC) debuted as an open-ended, private trust for accredited investors, and it received approval from the Financial Industry Regulatory Authority (FINRA) to trade publicly in 2015. While this was not an ETF, it eventually became the first publicly traded Bitcoin fund in the U.S. and was ultimately converted into a spot-based ETF.

Following the SEC’s rejection decision, the Winklevoss twins led a second effort to get a spot Bitcoin ETF approval, only to be again denied by the SEC in 2018 after the agency deemed Bitcoin’s nature largely unregulated. 

Throughout the years, many wondered if there would ever be an approval for a spot ETF for Bitcoin, until Canada took the lead one day. According to Bloomberg ETF analyst Eric Balchunas, in 2021, Fidelity Canada launched a spot Bitcoin ETF, making them the largest asset manager with a Bitcoin ETF at the time. 

In 2022, the SEC rejected more applications for a spot Bitcoin ETF from asset managers SkyBridge, Fidelity, Bitwise and Grayscale. In response, Grayscale Investments launched a lawsuit against the SEC after its application to convert GBTC into a spot-based ETF was denied. 

Related: Spot Bitcoin ETF could bring $30 trillion into the market — Grayscale CEO

In 2023, asset managers BlackRock and ARK Invest joined in on the race for a spot in Bitcoin ETF, further fueling hopes that the new Bitcoin investment vehicle will eventually be approved. On Aug. 29, 2023, Grayscale scored a win when the U.S. Court of Appeals Circuit Judge Neomi Rao ordered the SEC to grant Grayscale’s petition for review. While it did not guarantee an eventual listing of a Grayscale spot Bitcoin ETF, the ruling made the community hopeful that a spot Bitcoin ETF is on the way. 

In December 2023, there have been many discussions between the SEC and the spot ETF applicants. By the start of January 2024, the ETF issuers finalized the documents required for their spot Bitcoin ETF applications and awaited the SEC’s response. 

On Jan. 9, the SEC’s official X (Twitter) account published a post saying that the commission has approved the spot BTC ETF applications. However, SEC Chair Gary Gensler almost immediately refuted the announcement, saying that the SEC’s X account was compromised and clarified that the SEC had not yet approved the listing and trading of the ETFs. 

On Jan. 10, the Cboe BZX Exchange said in letters filed with the SEC that spot BTC ETF offerings from ARK 21Shares, Invesco Galaxy, Fidelity, VanEck, WisdomTree, and Franklin Templeton have been approved. While the SEC’s full approval was still pending, Cboe’s letter fueled speculation that the SEC might simultaneously approve multiple offerings from asset managers.

On the same day, the SEC finally approved the 19b-4 applications from asset managers ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex and Franklin Templeton. This paved the road for the first regulated spot Bitcoin ETF product in the U.S. This allows investors to have direct exposure to Bitcoin (BTC) without storing the asset in crypto wallets. 

On Jan. 11, the first spot Bitcoin ETF started trading with a volume of $2 million worth of shares in the pre-market and showed double-digit gains on the Nasdaq exchange. 

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