Major financial institutions, including Grayscale, VanEck, and Fidelity, were among the 11 funds allowed to issue securities that will be linked to the price movements of the 15-year-old cryptocurrency. Australian investors can access the bitcoin spot price ETF products listed in the US through local brokerages.
Investors have long awaited the Securities and Exchange Commission decision, which enables retail investors to hold bitcoin exposure without needing to manage cryptographic keys and bitcoin wallets or interact with unregulated crypto exchanges.
“Today’s approval is a milestone for bitcoin and cryptocurrencies more generally,” said Jonathon Miller, managing director of Kraken Australia, a cryptocurrency exchange. “An ETF makes bitcoin accessible to a broader range of investors and signifies tacit acknowledgment that the crypto asset class is here to stay.”
The New York Stock Exchange, Nasdaq, and Cboe Global Markets have all received permission to list the spot bitcoin ETFs, which investors can begin trading this week.
BlackRock, Fidelity, and Grayscale have already announced their fee plans for investors, marking the start of a fierce battle to attract investor money to the new asset class.
But SEC chairman Gary Gensler warned that the approval does not reflect the regulator’s broader acceptance of cryptocurrencies. Mr Gensler noted that the underlying assets of other exchange-traded funds, like metals, 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,” he said. “While we approved the listing and trading of certain spot bitcoin [ETF] shares today, we did not approve or endorse bitcoin.”
Swyftx, a local cryptocurrency exchange, said early trading volumes had jumped more than 80 percent, while bitcoin trade volumes in the fourth quarter had almost doubled from a year earlier.
“Local investors believe the ETF approvals are a landmark event that will drive significant additional demand,” said Jason Titman, Swyftx’s chief operating officer.
“You don’t need to be an existing Bitcoin user to understand the importance of it controlling a place in Wall Street portfolios. We think it unlikely the market will get upended overnight, but signals are important, and this is a significant institutional vote of confidence in the future of digital assets.”
The decision comes after months of intense industry lobbying. The focus has been on spot price ETFs, meaning the institutions directly hold bitcoin rather than derivatives contracts tied to the price.
Australia is set to allow a local spot bitcoin ETF in the first half of this year.