Crypto faithfuls cheer bitcoin ETF approvals — and investing titans tussle for market share
Bitcoin’s debutante ball… The SEC approved 11 spot bitcoin exchange traded funds, which finally began trading last week after a decade-long push from the crypto industry (and a wild hack of the SEC’s X account). The funds let investors get exposure to BTC’s price without having to, you know, own crypto. It means less stressin’ over hacks and lost keys. Also, since bitcoin ETFs can live at SIPC-insured registered broker-dealers, there’s less potential loss if your exchange goes bankrupt (cough: FTX). As ETFs debuted on US stock exchanges, industry insiders predicted an influx of crypto-vestment.
More than a bit: $4.6B worth of bitcoin ETF shares changed hands on Thursday, with Grayscale’s setting a record for the highest trading volume ever for an ETF’s first day.
ShortPop: Bitcoin blipped past $49K on Thursday, a two-year high. But the SEC’s approval had been anticipated, and BTC’s price fell to $43K on Friday.
Don’t want to market-share… The companies that had their BTC ETFs approved are a mix of legacy investment managers and crypto-focused players, and they’ve already started shoving elbows. BlackRock and Fidelity have slashed their ETF management fees to compete in what could be a winner-take-all business. Meanwhile, Bitwise, Ark Invest, and 21Shares — which also had spot bitcoin ETFs approved — are offering temporary promo fees of 0%. If crypto ETFs start getting included in retirement accounts, traditional finance heavyweights might want a bigger slice of crypto cake.
Boring’s good for business… but risks complacency. The SEC’s approval suggests that finance’s old guard is starting to embrace crypto as another cog in its machine, which might fuel more investment. It could be just the start, with traders already murmuring about a spot ethereum ETF. Still, seeking the approval of what many crypto heads derisively refer to as “TradFi” (traditional finance) is a far cry from crypto’s rebellious roots that got so many excited in the first place.