SEC’s approval of Bitcoin ETFs is a game-changer for the crypto ecosystem

Avatar photo

Vrasidas Neofytou
Head of Investment Research

See all articles
SEC’s approval of Bitcoin ETFs is a game-changer for the crypto ecosystem

January 10 was a great day for the crypto ecosystem and the world's largest cryptocurrency, as the U.S. Securities and Exchange Commission approved the first spot U.S.-listed exchange-traded funds (ETFs) to track Bitcoin.

The U.S. securities regulator approved 11 ETF applications, including from BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck, while most of the ETFs are expected to begin trading today.

SEC’s decision on Bitcoin spot ETFs is a game-changer development for the crypto ecosystem, promoting the institutionalization of Bitcoin as an asset class, which is expected to attract billions in new investments to the crypto market.

The Bitcoin ETFs could also pave the way for other innovative crypto products, including ETFs tracking the second-largest cryptocurrency Ethereum, or other major altcoins such as Solana.

A spot Bitcoin ETF would provide a cost-effective and convenient way for traders, speculators, and institutional investors to track the price of Bitcoin.

The ETF addresses some of the challenges and operational burdens that have previously deterred investors from directly investing in cryptos.

The U.S. Securities and Exchange Commission (SEC) has declared the registration statement for the spot bitcoin ETF effective, marking a significant milestone for investors seeking exposure to the cryptocurrency market through a regulated exchange-traded fund.

 

Market reaction:

SEC’s approval is seen as a bullish sign for the leading cryptocurrency, and it has been a driving force behind the crypto rally over the past three months.

The price of Bitcoin has impressively recovered from the lows of $25K in mid-October to the yearly highs of $48K at the first trading sessions of 2024, lifting its market cap at $900.73B or 52.52% of the total cryptocurrency market cap.

BTC/USD, Daily chart

Ethereum gained 10% to $2.600 after the SEC’s approval, pushing its market cap up to $300B, or nearly 18% of the total cryptocurrency market cap, in anticipation of ETH ETFs. At its current price, Ethereum is still down nearly 50% from its all-time high of $4,864.06 set on November 10, 2021.

Altcoins also rallied on the positive approval, with Solana breaking above the $100 psychological level, AVAX rising to $40, Cardano to $0.60, XRP to $0.62, and Polkadot to $8.50, while SUI rallied above the $1 level.

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

Read our detailed Marketing Communication Disclaimer

SHARE

CONNECT WITH OUR TEAM

Explore the ways in which we can help you achieve your investment goals.

OUR PARTNERS
bdo

EXTERNAL AUDITOR

ey

LEGAL ADVISOR

lgt

CUSTODIAN BANK

efg

APPROVED PARTNER

Raiffeisen

DEPOSITORY BANK

Prime Fund

GROUP MEMBER

c