Crypto investors have a reason to smile on Thursday. That's because the U.S. Securities and Exchange Commission (SEC) has just given the thumbs up to spot Bitcoin (CRYPTO: BTC) exchange-traded funds (ETFs).
This is being seen as a big positive for the cryptocurrency market as it opens up Bitcoin to all investors, not just those who are comfortable using crypto platforms.
It also means that in the near future, investors will be able to add exposure to the spot Bitcoin price to their investment portfolio with a simple click of a button.
What did the US SEC say about the Bitcoin ETF?
US SEC chair Gary Gensler appeared somewhat reluctant to approve Bitcoin ETFs, highlighting that a recent court ruling left it with little power to deny their approval. He said:
I have often said that the Commission acts within the law and how the courts interpret the law. Beginning under Chair Jay Clayton in 2018 and through March 2023, the Commission disapproved more than 20 exchange rule filings for spot bitcoin ETPs. One of those filings, made by Grayscale, contemplated the conversion of the Grayscale Bitcoin Trust into an ETP.
We are now faced with a new set of filings similar to those we have disapproved in the past. Circumstances, however, have changed. The U.S. Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale's proposed ETP. The court therefore vacated the Grayscale Order and remanded the matter to the Commission. Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares.
Will other cryptocurrencies follow?
Gensler was quick to shoot down any hopes that other cryptocurrencies could soon have their own ETFs. He said:
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.
When will it be available on the ASX?
While Bitcoin ETFs will soon be available on Wall Street, that isn't exactly easy access for Australian investors.
In the meantime, the Cboe exchange (formerly known as Chi-X) offers Australians the Global X 21Shares Bitcoin ETF. It provides holders an interest in Bitcoin held in cold storage by Coinbase (NASDAQ: COIN), the world's largest custodian of cryptocurrencies.
Editor's note: An earlier version of this article suggested a spot Bitcoin ETF has yet to come to market in Australia. However, options are available locally through Cboe Australia.
