Bitcoin BTF24 held steady on Thursday, around its highest level since March 2022, after U.S. regulators approved the first U.S.-listed exchange-traded funds (ETFs) to track the cryptocurrency in a landmark move that could broaden its appeal to investors.
On Wednesday, the Securities and Exchange Commission (SEC) approved 11 applications, including BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck.
Three ETFs, including BlackRock’s, were trading by 0930 GMT Thursday, with more expected to begin later. Bitcoin was last trading around $46,250, up 0.6 percent on the day and holding on to gains it made this week in anticipation of the approval.
The world’s largest cryptocurrency has risen nearly 9 percent this year and hit $47,915 on Tuesday, its highest since March 2022.
It more than doubled in price last year, something of a recovery after a turbulent 2022 for the crypto industry when several significant companies collapsed, most notably trading venue FTX.
“At its core, a spot Bitcoin ETF simply provides standardized access to the digital asset as an investment, without altering Bitcoin’s core proposition,” said Marion Laboure, senior strategist at Deutsche Bank Research.
“Only time will tell if greater adoption will lead to more transformational outcomes for the crypto ecosystem and financial system. The ETF approval now opens a new chapter for bitcoin prices, though volatile conditions are likely to persist.”
Spot bitcoin ETFs were already available in other markets, including Canada and Europe, but they have failed to attract significant investor interest.
Industry participants were optimistic that the new U.S.-listed products would drive greater demand for bitcoin.
Retail and institutional investors “no longer need to rely on futures trading or self custody to have exposure to Bitcoin, and can use a traditional brokerage account,” said Nick Ruck, COO of ContentFi Labs, a blockchain firm focused on IP licensing.
He said that Bitcoin’s supply is fixed, so if the ETFs need more to meet demand, they will have to buy in the market.
The industry’s focus is now on the second largest cryptocurrency, ether, which underpins the Ethereum blockchain network.
BlackRock filed for a spot in Ethereum ETF in November 2023.
Ether’s price rose as much as 4.4 percent on Thursday to $2,638, its highest since May 2022.
“Now that we’ve had confirmation of what was already a highly-anticipated bitcoin announcement yesterday, the market’s now quickly moving on to ETH, saying, well, if bitcoin is done, then it’s now very highly likely that the ETH one will get done as well,” said Geoff Kendrick, head of digital asset research at Standard Chartered.