The US Securities and Exchange Commission has approved eleven spot bitcoin ETFs, including ones from Grayscale, Fidelity, and Bitwise. In a statement, a Grayscale spokesperson said the SEC “approved our application to uplist the shares of Grayscale Bitcoin Trust to NYSE Arca as a spot Bitcoin ETF.”
SEC Chairman Gary Gensler made it clear in a statement, however, that he is still not a fan of bitcoin, writing “bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing. While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin.”
The news comes a day after the SEC’s X account was compromised and a false statement about the approvals was posted.
The ETFs could start trading as soon as Thursday.
Yahoo Finance’s Julie Hyman, Josh Lipton, Jennifer Schonberger, and David Hollerith report the breaking details.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor’s note: This article was written by Stephanie Mikulich
Video Transcript
JULIE HYMAN: Breaking news, the Securities and Exchange has indeed approved 10 spot Bitcoin ETFs here. I believe– is it 11 of these? Anyway, they’ve approved the spot Bitcoin ETFs here. We know this now. The release is out. It is official.
Gary Gensler also is out with an official statement in which he still is very cautious about Bitcoin itself, and makes it very clear in the statement, we did not approve or endorse Bitcoin, he says, at the end of his statement. So after a lot of back and forth, a lot of confusion, indeed, the spot Bitcoin ETFs have been approved. Grayscale also out with a statement on this. And these products are expected to begin trading as soon as tomorrow.
JOSH LIPTON: Yeah, it is interesting how he ends the letter that, again, emphasizing the caution, right? Says, listen, yes, we approve this, doesn’t mean we’re approving or endorsing this asset, right? I mean, investors, he said, should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto. That was also interesting.
He made a point because, as people see these new products getting approved by the SEC, already people started thinking about, well, what else are they going to approve coming down the line this year, maybe later this year? And he goes on to say here, just because we approve this doesn’t– shouldn’t take this too, in fact, he says, sort of signal how we think about the status of other crypto assets as well.
JULIE HYMAN: I mean, there is anticipation that once this happened that the Ether– the spot Ether ETF–
JOSH LIPTON: Spot Ether ETF, right.
JULIE HYMAN: –would be approved later in this year. But that’s putting the cart before the horse, especially if you’ve been around for the past 24 hours, right? There will be, eventually, options trading most likely on these products. So that could also add a dimension here.
But I think that the drama around this is notable as well, with someone gaining unauthorized access to the SEC’s official X account yesterday and posting that this had happened. And I think also, yes, it was sort of noise, but at the same time, in an industry that is striving for legitimacy and has been for quite some time, and adoption– broader adoption. It’s not a great look–
JOSH LIPTON: No.
JULIE HYMAN: –that that happened.
JOSH LIPTON: Well, and yeah, no. It isn’t a great look with that happen. And it’ll be interesting. I think we have David and Jennifer actually here to get their views as well. Bring them in here to get their response to this news. But I agree with you. I mean, with the news yesterday, that just total debacle, and then the kind of back and forth that we saw with X.
I mean, obviously, Elon Musk owns X. He is not a huge fan of the SEC. I’m trying to find a way to put that as diplomatically as I can. So they’re kind of going back and forth, saying, listen, not our problem. It’s your problem. You didn’t even have basic 2-factor authentication enabled on your account. So there was a lot of drama around that. And I think it is like what some of the ramifications of that. Is there a black eye left there?
JULIE HYMAN: Right. Well, bottom line, they’re approved. And so let’s indeed bring in Dave Hollerith and Jennifer Schonberger, who have been all over this, you guys. Thank you both very much for helping me understand all of this as it was unfolding. Dave, I want to start with you. I’m a little confused here about how many issuers applied and how many have indeed been approved. Can you break that down for us?
DAVID HOLLERITH: Yeah, so I mean, at one point, we had a total of 14 issuers. And at this point, 11 have been approved. There are two, Global X ETF and also Pando, a Swiss firm. And they have both not been added. One part of that has to do with just timing of their filing compared to the other applicants who have filed. But right now, at this point, we’re looking at 11. And I guess we’ll find out a little bit more about what’s happened to the others.
JOSH LIPTON: And Jennifer, I want to bring you here in as well and actually just get your take on– I don’t know if you heard what Julie– we were just talking about here. This was– I mean, yesterday was a debacle, right? That was not the headline anybody wanted to see. It caused a lot of confusion. It triggered Bitcoin prices up and down.
When you think about that, Jennifer, and then, of course, X coming in and saying publicly, listen, this wasn’t us. You had your systems compromised, not ours. You didn’t even have basic 2-factor authentication enabled on your account. And meanwhile, you’re the police of the financial markets. I’m wondering, Jennifer, is there a reputational hit here for the SEC? Do you think they have a black eye after this?
JENNIFER SCHONBERGER: I was just going to say, Josh, this is kind of a black eye for the SEC. And I was listening to your dialogue before you brought us in. And you guys were spot on. And I think the fact that it created so much volatility in Bitcoin’s price sort of underscores the SEC’s fears about market manipulation here. You had a hacker come in, create– put some information, false information, or premature information, on an official government account that caused major swings in Bitcoin’s price, which is going to create a lot of whiplash for investors.
Now, of course, we have the official trading vehicles, so perhaps the SEC will be better able to regulate these. And Chair Gensler clearly points out in his statement, a very long statement that sponsors of these Bitcoin ETFs are going to be required to provide full, fair, and truthful disclosure of these products. So we’ll see how they’re able to navigate this going forward. But I think also, to your point, this doesn’t mean just because the SEC has approved spot Bitcoin ETFs that necessarily Ethereum is next in line.
JULIE HYMAN: Yeah, I think that’s a good point. And I think we’ll– it was interesting. In our discussion earlier today on Yahoo Finance with Valkyrie’s Steven McClurg, when he was asked, do you see Gary Gensler as a friend or foe of the industry? He acknowledged that much of the industry does see him as a foe.
He, however, didn’t view it that way. He said, we have seen that these products have been introduced and adopted. So he said, we have seen progress in the US, even if it’s maybe not as quick as some in the industry would have wanted. So Dave, I guess then, kind of, what’s next, right? It looks like we are going to see trading of these products tomorrow. And then, the folks you’re talking to, what are they expecting from them?
DAVID HOLLERITH: Yeah, it’s kind of funny you mentioned this. The Bitcoin price right now has been relatively flat, unless my price charts are lagging, which is a total possibility. But it is kind of funny after all of this that things are largely flat today. But approval with the exchanges has been sort of that dialogue has been ongoing. And it looks like they’re effective to trade as soon as tomorrow.
So the exchanges have been actually preparing with issuers for a potential listing behind the scenes for a while now. And what’s going to be big there is the first-day flows that each of the issuers or these products have. And that, to a large extent, is, Julie, I know, as you’ve spoken with a lot of people about, is really important as far as like which of these products have staying power. So that’s going to be a whole other story for tomorrow.
JULIE HYMAN: Yes. it will.
JENNIFER SCHONBERGER: Can I jump in here, guys?
JULIE HYMAN: Please.
JENNIFER SCHONBERGER: So, just adding on to what David said. Everyone’s focused on, this is the watershed moment. And this is when we’re all of a sudden going to see so many retail assets flow into these ETFs. Or ETPs, I should say, they’re exchange-traded products. A lot of people keep calling them exchange-traded funds, they’re actually exchange-traded products. But– so we’ll see if that happens.
But I think it’s important to take a step back because, really, what this does is it makes it easier for pension funds, 401(k) investors to gain exposure in a limited way or a large way to Bitcoin in a way that they haven’t been able to do previously, right? You had to go and take your dollars and then buy Bitcoin on some sort of exchange, like Coinbase, in order to gain exposure.
Now you can go through your Charles Schwab or your Fidelity account and easily just, click on that ETP. So I think it does open the door. And we need to take a longer-term view of how retail cash flows are going to flow into this asset class over the next year or so or the coming months, right? Not just the next couple of days.
JULIE HYMAN: Yeah, and that’s something that’s been echoed by the issuers themselves as well. They’ve sort of cautioned against the idea that on day one that there’s going to be this huge flood of assets. It’s going to be a process that’s going to perhaps take some time. Good reminder. Thank you, David and Jennifer. And thank you very much for your hard work on this story, appreciate it.