The cryptocurrency industry has begun the year with a significant development, as bitcoin exchange-traded funds (ETFs) made their debut in mid-January and swiftly amassed approximately $2 billion in the first three days of trading.
The long-awaited approval of 11 spot bitcoin ETFs by the US Securities and Exchange Commission (SEC) came as a surprise to many. However, for experienced digital asset investors, this move was long overdue.
Since its inception in 2009 as the first cryptocurrency, Bitcoin has been perceived as highly risky and volatile. Nonetheless, proponents of cryptocurrency have persisted in bringing about this moment.
In August 2023, the SEC faced a crucial moment when Grayscale, the world’s largest digital currency asset manager, emerged victorious in a pivotal court battle against the US regulator in a bitcoin lawsuit.
Shortly before this victory, the financial giant BlackRock made a bold move by filing for a spot bitcoin ETF, paving the way for other major players such as Invesco, Fidelity, and Franklin Templeton to follow suit.
With the launch of multiple ETFs last month, BlackRock and Fidelity quickly took the lead with over $1 billion in inflows within days. Other firms are proceeding more cautiously but with equal confidence. Patrick O’Connor, head of Global ETFs at Franklin Templeton, expressed his excitement on January 11th, stating, “Bitcoin offerings are a very exciting addition to our product lineup. With our bench strength in digital assets, as well as our experience in offering a wide array of ETFs, we are well equipped to expand into the new frontier of digital-asset ETFs.”
In just the first week of trading, bitcoin ETFs surged to become the second-largest ETF commodity in the US in terms of assets under management (AUM), quickly overshadowing silver.
Now, some of the bitcoin ETF pioneers are setting their sights on the next challenge. Grayscale and BlackRock are working on securing approval for spot Ether ETFs, which are anticipated to launch by the end of May. The excitement generated by the SEC’s landmark ruling has also spread across the globe, with Asia showing a growing interest. Bitcoin ETFs are expected to debut in Hong Kong by March, and there are rumours of South Korea and Indonesia exploring this option as well.
The cryptocurrency market has seen a significant shift with the introduction of bitcoin ETFs, and the industry is eagerly anticipating the impact and potential for further growth in the coming months.
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