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How long it was! Since the approval of first Bitcoin ETFs future (based on dollar-settled futures contracts) in October 2021, the cryptosphere was (im)patiently waiting for the Securities and Exchange Commission (DRY) also approves Spot Bitcoin ETF (Or spot). After years of waiting, today, January 10, 2024, the event finally happened: Gary Gensler (SEC Chairman) capitulated and we our first Spot ETF from the king of cryptos! And the lucky ones are…
Year-long fight against SEC results in Bitcoin victory
In fact, even before the AND F based on futureour dear Bitcoin had achieved a first breakthrough – unprecedented for a cryptocurrency – in the world of traditional financial products. We must therefore go back more than 6 years ago, in December 2017when the first Bitcoin futures contracts (of the future therefore, precisely) Chicago Mercantile Exchange (CME) were approved by the Commodity Futures Trading Commission (CFTC) – which is the other financial regulator in the United States, along with the SEC.
But the Securities and Exchange Commission for her part, showed herself a lot (really a lot) slower and less constructive than the CFTC. As mentioned in the introduction, it was therefore necessary to wait October 2021 to obtain its approval of a first exchange-traded fund (Exchange-Traded Fund) : L’ProShares Bitcoin Strategy ETF (BITO), listed on the New York Stock Exchange (NYSE, New York Stock Exchange).
But for more than 2 years: Nothing, absolutely nothing. Above all and even more since the arrival of the very anti-crypto Gary Gensler as chairman of the SEC, appointed by Joe Biden in April 2021. The US Securities and Exchange Commission has dragged your feet like never beforeplayed for time, kicked in touch, and all the synonymous expressions of the genre that can express its total bad will to the task of approving a spot Bitcoin ETF. But this dark era is now close.
Validated spot Bitcoin ETF: will institutional investors pour in their masses of money?
The ETFs of BlackRock, Ark Invest & 21Shares, VanEck, Fidelity, Invesco & Galaxy, Valkyrie, Hashdex, Franklin Templeton, WisdomTree, Bitwise, Grayscale were therefore finally approved on January 10 by the Securities and Exchange Commissiondespite the war led by Gary Gensler against the crypto sector (his “personal Vietnam” as it was masterfully formulated Cathie Woodthe boss of ARK Invest).
Note, however, that the official document was only available for a few minutes on the internet and now leads to a 404 page. Is this a new faux pas by the SEC? No one knows yet.
But let’s briefly recall the important difference between ETFs future And spot. If the first are therefore based on futures contracts settled in dollars (or other fiat currencies), spot ETFs imply that the issuer owns the underlying asset to this type of financial product. Here, it is therefore a question of bitcoins hard cash from the famous blockchain network.
Now that the good news is finally confirmed, what will be next? Some consider that the increase in Bitcoin price of recent months had already “ priced » (taken into account in the quotation) the approval of such spot ETFs from the king of crypto-assets. The latter are therefore now rather bearish for the crypto market, in “ Buy the Rumor, Sell the News » (buy while it’s just a rumor, sell as soon as it’s official news).
But others are, however, convinced that the institutional investors (the “zinzins” as they are called in the financial world) will be unleashed in buying frenzy of these Bitcoin spot ETFs. Especially since experts in this type of very rich investors think thatan “army of salespeople” (investment advisors and asset managers) is going to be very wishing to offer this new Bitcoin financial product, to pocket nice intermediary commissions. The titans of finance understood it welland this most certainly motivated their long struggle against the SEC to finally have their Bitcoin Spot ETF validated.
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