The Securities and Exchange Commission on Wednesday approved 11 exchange-traded funds tied to the spot price of bitcoin, a decision commission Chairman Gary Gensler
On Thursday morning, the ETFs began trading on the New York Stock Exchange and Nasdaq Stock Market, including iShares Bitcoin Trust by Blackrock (
The approval came less than 36 hours after a false tweet from the SEC's account on social media platform X, formerly known as Twitter, which the SEC said had been the result of a hack.
Gensler, whose commission is bound to neutrality on particular investments, highlighted the risks and criminal utility of bitcoin, juxtaposing them with exchange-traded products (ETPs) pegged to the price of metals like gold and silver. Metals ETPs, he said, have "consumer and industrial uses.
"In contrast, bitcoin is primarily a speculative, volatile asset that's also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing," Gensler said. "While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin."
Gensler also emphasized that the 11 bitcoin ETF approvals regard only products pegged to bitcoin, not other digital assets. The ruling "should in no way" be construed to mean the SEC is willing to approve listing standards for crypto asset securities, he said.
This sentiment is one of many reasons to expect the SEC to move as slow as possible in approving other exchange products tied to crypto, such as spot ethereum ETFs, according to Jaret Seiberg, an analyst for TD Cowen Washington Research Group.
"The wait might not be as long as 26 months, but it likely would be after the election," Seiberg said of ethereum or other crypto token ETPs. He pointed out Gensler's term as chair extends to 2026, and that he could maintain a Democratic majority on the commission until then.
The SEC did not appeal a decision last year by the D.C. Court of Appeals in favor of Grayscale that found the SEC gave insufficient reason to deny the company's application for a spot bitcoin ETF. Since then, observers such as Ian Katz, a managing director at consultant Capital Alpha Partners, had an eye out for an approval this week or earlier from the SEC to approve the ETFs.
"Though expected, the decision is a massive coming-of-age moment for the crypto industry, as it allows investors to buy bitcoin the same way they buy other ETFs, stocks and mutual funds," Katz said in a note Tuesday. "Long-term, the approval helps legitimize bitcoin and crypto, even if the assets turn out to be more volatile than most mainstream investments."
Nathan McCauley, CEO and co-founder of Anchorage Digital, a bank that provides custody of digital assets including cryptocurrency, said the SEC's decision marks the end of an era in which crypto is a "novel" asset class and one in which "it can be part of every portfolio.
"SEC approval opens the floodgates for trillions of dollars to safely flow into the digital asset ecosystem via a regulated and accessible wrapper that suits consumers and institutions of all types," McCauley said.
As for performance on the spot bitcoin ETFs themselves, investors should expect "frothy price accumulation" as capital flows into the market from "a new class of institutional buyers," according to Michael Silberberg, head of investor relations at crypto-focused hedge fund Alt Tab Capital.
"If we look for an analogy, gold jumped approximately 250% four months after its first ETF approval and launched an eight-year bull run," Silberberg said.
