The Securities and Exchange Commission finally yielded to the inevitable on Wednesday, allowing 11 companies to package Bitcoin as shares and letting investors buy stock in the cryptocurrency just as they would shares of Apple or Tesla. Crypto billionaire Michael Saylor marked the moment by saying "Tomorrow Bitcoin Goes Public," and that description sounds about right.
Since the first batches of Bitcoins arrived in 2009—way back when the blockchain spit out 50 Bitcoins every 10 minutes—the cryptocurrency has been treated by many as something disreputable. This has especially been the case in Washington, D.C., and, until recently, on Wall Street, where bankers liked to sneer at it. Now, though, financial giants like BlackRock and Fidelity will be using their new ETFs as a vehicle to distribute Bitcoin to their many clients, who will in turn start including it in retail investors' pension and retirement funds. This will only increase mainstream support for Bitcoin and help turn many remaining detractors into allies.
I'm hardly the only one to hold the thesis that the long-term case for Bitcoin is bullish, and I'm confident it will be proved right in the next five years. The harder thing to predict is what happens in the short term. A quick look at the market confirms the popular crypto wisdom that any price jump from the ETF approval was largely baked in. The thing to watch now is whether the flood of new Bitcoin ETF shares, which will begin trading as soon as today, are snapped up or—as is very possible—if demand turns out to be muted and the currency slumps. A further wildcard is if the impending Bitcoin "halving," which will cut the supply of new coins per block from six to three, will deliver an additional fillip for demand or if that too is baked in. No matter what happens in the next few months, though, it does not change the long-term bull case.
The other thing to watch in the coming days is which of the Bitcoin ETF issuers gobbles up the biggest market share—history shows new ETFs are a winner-take-all business—and which firms just spent months on expensive legal paperwork to get 1% or 2% of the market. Meanwhile, a related and more interesting question is how long it takes for the SEC to approve an Ethereum ETF, which is also only a matter of time. And beyond that, will the likes of XRP and Dogecoin also get the coveted stamp of respectability that comes with an ETF wrapper? The answer could be years or never.
Finally, there is the matter of the SEC's colossal screwup on Tuesday, which saw a hacker take over the agency's X/Twitter account because it had failed to implement a basic security feature. This has already diminished Chair Gary Gensler's rapidly diminishing political clout, but also poses a fun mystery. As Matt Levine noted, a seasoned financial criminal could have used the compromised SEC account to come up with a more lucrative scheme than publishing a fake announcement about news that was already expected and priced in.
Go ahead and put on your criminal mastermind hat for a moment and think of how you could make the most money with the SEC's Twitter account. Maybe announce a criminal investigation of Apple while shorting the stock? You get the point. Fortunately, the hacker (who is in huge trouble if caught) didn't do anything of the sort, suggesting that Levine may be right that the whole point was to troll the hell out of Gensler. Chalk it up to yet another colorful moment in a crypto history full of them.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
