Wall Street Enters The Crypto Age: SEC Issues Historic Approval Of Spot Bitcoin ETFs (UPDATED)

In a landmark decision, the Securities and Exchange Commission has approved the applications for spot Bitcoin BTC/USD exchange-traded funds.

The decision is expected to revolutionize the cryptocurrency and traditional finance sectors.

The SEC approved applications of the Grayscale Bitcoin Trust, the Bitwise Bitcoin ETF, the Hashdex Bitcoin ETF, the iShares Bitcoin Trust, the Valkyrie Bitcoin Fund, the ARK 21Shares Bitcoin ETF, the Invesco Galaxy Bitcoin ETF, the VanEck Bitcoin Trust, the WisdomTree Bitcoin Fund, the Fidelity Wise Origin Bitcoin Fund , and the Franklin Bitcoin ETF.

"... the Commission finds good cause to approve the proposals on an accelerated basis," the SEC stated.

In a release, SEC chair Gary Gensler said that in light of the U.S. Court of Appeals for the District of Columbia's decision, which said the SEC's reasoning in the Grayscale order disapproval was inadequate, the SEC approved Bitcoin ETF applications.

He further said the watchdog's decision is confined to exchange-traded products (ETPs) holding Bitcoin and that it should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.

"Nor does the approval signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws," he said.

He further said the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast Bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasions and terrorist financing.

Why It's Important: The SEC's decision comes a day after a false tweet from the compromised X (formerly Twitter) account of the SEC erroneously announced the approval of all Spot Bitcoin ETF applications.

SEC Chairman Gary Gensler later disclosed the hack and discredited the tweet, leading to a rapid decline in Bitcoin prices.

Experts believe this decision could merge traditional finance with the cryptocurrency sector by providing a familiar, regulated investment vehicle that increases Bitcoin's accessibility and legitimacy.

Brendon Sedo, a contributor to Core DAO and an expert in digital asset mining, said he believes this will lead to more innovative use cases and further integration of Bitcoin with traditional finance.

Austin Alexander, co-founder of LayerTwo Labs, sees this as a significant moment for Bitcoin's legitimacy.

“I think a lot of fresh capital will be flowing into Bitcoin with the approval of these spot BTC ETFs," he stated, viewing the ETFs as a crucial step in making Bitcoin a legitimate asset in the eyes of global investors.

Frank Hu, COO of ByteTrade Lab, highlighted the broader impact on the digital asset ecosystem.

“People are focusing on how these Bitcoin ETFs will attract a tremendous amount of passively invested capital... I also think these ETFs will do a lot in terms of boosting the rest of the digital asset ecosystem, not just BTC," Hu remarked.

Also Read: Bitcoin Crash Looming? BitMEX's Arthur Hayes Predicts Rug Pull Dropping Price By 40%

Implications For The Crypto Market: The approval is expected to attract a new wave of investors by simplifying entry into the crypto market while addressing concerns like AML regulations and investor safety.

Slava Demchuk, co-founder of AMLBot, emphasized the importance of regulatory oversight and the development of new products with enhanced cybersecurity and robust AML/KYC protocols.

Cecilia Hsueh, co-founder and CEO of Morph, sees the approval as a turning point for the industry, potentially leading to increased investment and growth for major cryptocurrencies and startups.

“As the market matures, we expect to see more institutional involvement, which could lead to greater stability and growth in the long term," Hsueh noted.

The SEC's approval of spot Bitcoin ETFs marks a significant milestone in the integration of cryptocurrencies with traditional financial systems and is expected to bring a new era of growth, innovation and stability to the broader digital asset ecosystem.

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