After the approval by the SEC, today marks the beginning of the first trading sessions of ETFs on traditional markets: expectations, details, and reactions.
On January 10, the Securities and Exchange Commission approved eleven applications for the issuance of a spot Bitcoin ETF.
Today, Thursday, January 11, the trading of ETFs on traditional markets is expected to commence.
According to some reports from Bloomberg, the first 24 hours could witness an influx of capital around $4 billion. Other estimates, such as Standard Chartered’s, anticipate the possibility of capital inflow reaching approximately $100 billion in the first year.
Where will they be traded?
These are the eleven approved ETFs with their respective tickers:
- Blackrock’s iShares Bitcoin Trust (IBIT)
- ARK 21Shares Bitcoin ETF (ARKB)
- WisdomTree Bitcoin Fund (BTCW)
- Invesco Galaxy Bitcoin ETF (BTCO)
- Bitwise Bitcoin ETF (BITB)
- VanEck Bitcoin Trust (HODL)
- Franklin Bitcoin ETF (EZBC)
- Fidelity Wise Origin Bitcoin Trust (FBTC)
- Valkyrie Bitcoin Fund (BRRR)
- Grayscale Bitcoin Trust (GBTC)
- Hashdex Bitcoin ETF (DEFI)
The ETFs will be listed on major U.S. exchanges: New York Stock Exchange (NYSE), NASDAQ, and Cboe BZX Exchange. Five ETFs will be listed on Cboe BZX Exchange, three on the New York Stock Exchange (NYSE), and two on NASDAQ.
The Invesco Galaxy Bitcoin ETF will be listed on the Depository Trust and Clearing Corporation’s (DTCC).
Differences among the various ETFs
While they have similar characteristics, each ETF differs in some details. The main differences focus on fees and custody methods, providing investors with various options in choosing the best product.
Management fees range from 0.20% to 1.5%. Bitwise offers a 0.20% fee, the lowest among all issuers. Ark 21Shares follows with a 0.21% fee. VanEck and BlackRock have opted for a 0.25% fee, while Invesco Galaxy and Fidelity have a fee of 0.39%. Valkyrie and WisdomTree have a cost of 0.49%, and Hashdex has a fee of 0.94%. Grayscale applies a management fee of 1.5%, the highest in the market.
Some issuers, including Bitwise, BlackRock, ARK, and Invesco, have set an initial zero-commission period to attract more investors.
Regarding the custody of bitcoin, most managers have chosen to rely on the Coinbase exchange to safeguard and manage the underlying asset of the ETF. VanEck, Hashdex, and Fidelity have opted for different solutions. VanEck has chosen Gemini, Hashdex has opted for BitGo, while Fidelity has decided to perform self-custody of its own bitcoin.
Issuers have chosen various U.S. financial institutions to improve liquidity and ensure efficiency in the trading of shares. Authorized participants include Jane Street, JP Morgan Securities, Virtu Americas LLC, Macquarie Capital, ABN AMRO, Marex Capital Markets Inc., and Cantor Fitzgerald & Co.
The industry’s reactions
There have been numerous immediate reactions following the approval.
Cory Klippsten, CEO of Swan Bitcoin, stated:
“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.
Leah Wald, CEO of Valkyrie, stated:
“Today’s approval of spot bitcoin ETFs is a landmark moment for the digital asset industry. It’s a bold acknowledgement that crypto is here to stay.”
Details on the approval
According to some details, the approval of spot ETFs was subjected to a vote by the SEC commission. The five-member commission was divided with three favorable votes and two opposing votes. Specifically, Chairman Gary Gensler, Hester M. Peirce, and Mark T. Uyeda expressed a positive vote, while Caroline A. Crenshaw and Jaime Lizárraga voted for rejection.
Immediately after the approval, SEC Chairman Gary Gensler stated:
“While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin.”
He also stated:
“Importantly, today’s Commission action is cabined to ETPs holding one non-security commodity, bitcoin. It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities. Nor does the approval signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws or about the current state of non-compliance of certain crypto asset market participants with the federal securities laws. As I’ve said in the past, and without prejudging any one crypto asset, the vast majority of crypto assets are investment contracts and thus subject to the federal securities laws.”
