Bitcoin could finally get its first ETF, opening the door to institutional crypto trading
Bitcoin’s big W… The first bitcoin-backed ETF could be closer than ever. This week, Grayscale Investments, the world’s biggest crypto fund, scored a rare victory after a DC court ruled that the US Securities and Exchange Commission was wrong to deny its request to convert its bitcoin fund into a spot bitcoin ETF last year. Exchange-traded funds typically invest in a basket of securities (like stocks) to track their movement and can be traded like a regular stock. Bitcoin ETFs would allow investors to get direct exposure to the coin without actually owning it.
Up next: While Grayscale’s CEO says the decision is a “huge win” for crypto, the SEC still isn’t required to approve the ETF application and could appeal the ruling.
Crypto craze: Bitcoin’s price jumped nearly 6% after the decision on Tuesday, while Coinbase stock rose more than 15%.
Crypto’s Wall Street dreams… For over a decade, crypto firms have tried to launch ETFs directly tied to bitcoin’s spot price in hopes of attracting more institutional investors. So far the battle’s been a losing one. The SEC has denied all 30+ ETF proposals since 2021, saying applicants haven’t shown they can prevent market manipulation. But optimism picked up in June after BlackRock, the world’s largest asset manager, filed for its own bitcoin ETF.
Blockchain boost: Analysts just boosted bitcoin’s ETF approval odds to 75% by the end of this year, and 95% by the end of 2024.
One key can open many doors… While the DC court’s decision doesn’t guarantee Grayscale’s ETF request, it's an important step toward eventual approval. Several bitcoin spot ETF applications were expected to get the SEC’s “first deadline” decision in the coming days, but yesterday the regulator delayed some decisions to October. Since crypto enthusiasts view spot ETFs as an entry into the regulatory mainstream, approval could pave the way for more wins.