KEY POINTS
- The SEC gave permission to sponsors of about a dozen Bitcoin ETFs
- Trading of Bitcoin ETFs is expected to start Thursday
- Bitcoin was trading in the green zone at $46,260.44as of 3:18 a.m. ET on Thursday
Bitcoin, after finally earning the stamp of approval from the Securities and Exchange Commission (SEC) that allowed the creation of a BTC exchange-traded fund (ETF) in the U.S., soared over 3% to $47,300, leading to a broader market-wide rally following the historic breakthrough in the nascent industry.
Bitcoin saw a significant spike in its value Wednesday following the approval of Bitcoin ETF in the country, although it was nowhere near its all-time high price of $69,000 in November 2021.
The eagerly awaited yet controversial decision from the major Wall Street regulator granted permission to sponsors of 10 ETFs, including Grayscale, ARK and 21 Shares, Invesco, and Fidelity.
The funds are anticipated to trade on stock exchanges as soon as Thursday morning when BlackRock, a mega asset management firm based in New York, rings Nasdaq's opening bell to market its iShares Bitcoin Trust, its own Bitcoin ETF.
"The SEC didn't have strong arguments to reject these filings. This final decision will be accompanied by price volatility, and BTC might experience a correction due to the fact-selling effect after several months of dramatic growth. However, the overall dynamic will remain bullish, and the approvals will have long-term positive implications for this asset," Ruslan Lienkha, chief of markets at Web3 fintech platform YouHodler, told International Business Times in an email following the SEC's decision.
"This final positive decision from the SEC will stimulate the growth of cryptocurrencies. I belive such an ETF is unlikely to have any significant impact on TradFi because digital assets are still risk assets, which means that despite the interest in the crypto market, investors won't allocate a significant share of their portfolio in cryptos. At the same time, even a small percentage of a portfolio specifically of institutional investors can boost crypto market capitalization," Lienkha added.
The executive also made a forecast of the crypto market post-Bitcoin ETF approval and highlighted the possibility of complete integration of cryptocurrencies into the traditional financial system, which would make it easier for non-crypto investors to enter the cryptocurrency market.
"Talking about the future, I think that the major cryptos will be fully integrated into the traditional financial system. The integration will boost crypto market capitalization and decrease the volatility of the main digital assets. Therefore, Bitcoin may even get some credit rating and move from risk assets to another asset class," the YouHodler CMO shared.
"ETFs will spread and simplify investments in crypto. Digital assets are still difficult to understand for the average retail investor, who does not have enough technical knowledge about blockchain and prefers to deal with a trusted verified broker or bank. Thus, ETFs will give the opportunity for investors to enter the crypto market through any stock brokers using their own brokerage account. Different investment funds also will be able to invest in crypto through ETFs, at the moment many hedge funds and, for instance, pension funds cannot do it due to formalities such as investment declaration and local regulation which quite often limit the variety of possible instruments for investing in by type and credit rating," Lienkha said.
Bitcoin climbed down from the $47,000 price point hours after the SEC's approval of Bitcoin ETFs and was trading in the green zone at $46,260.44 with a 24-hour trading volume up by 37.44% at $52.3 billion as of 3:18 a.m. ET on Thursday.
The latest price action of the world's oldest crypto asset represents a 1.10% spike in its value on the day and a 7.71% gain in the last seven days.
According to data from CoinMarketCap, Bitcoin's current circulating volume is 19.6 million BTC, and its market cap is $907.06 billion.
