The year started with a bang for the cryptocurrency sector, with bitcoin exchange-traded funds (ETFs) going live in mid-January and attracting about $2 billion in the first three days of trading.
After a lengthy wait, the milestone approval of 11 spot bitcoin ETFs by the US Securities and Exchange Commission (SEC) surprised some operators, but for longtime digital asset investors, it was well overdue.
Bitcoin, launched in 2009 as the first cryptocurrency, has been considered excessively risky and volatile for years. The believers in the power of cryptocurrency fought to see this moment.
The day of reckoning for the SEC came in August 2023, when the world’s largest digital currency asset manager, Grayscale, won a crucial court battle in a bitcoin lawsuit against the US regulator.
Weeks earlier, financial giant BlackRock entered the crypto sphere by boldly filing for a spot bitcoin ETF, thus paving the way for other major players to follow suit, such as Invesco, Fidelity and Franklin Templeton.
After the debut of multiple ETFs last month, BlackRock and Fidelity quickly topped the chart with over $1 billion in inflows within days. Other firms are moving more slowly but are equally confident: Bitcoin offerings are “a very exciting addition to our product lineup,” says Patrick O’Connor, head of Global ETFs at Franklin Templeton in a statement on January 11th. “With our bench strength in digital assets, as well as our experience in offering a wide array of ETFs, we are well equipped to expand into the new frontier of digital-asset ETFs.”
In the first week of trading, bitcoin ETFs became the second-largest ETF commodity in the US in terms of AUM, swiftly overshadowing silver.
Some of the bitcoin ETF pioneers are now looking at the next challenge. Grayscale and BlackRock are working on approval for spot Ether ETFs, expected by the end of May. Across the globe, the excitement surrounding the SEC’s watershed ruling has been contagious, with Asia also warming up to the idea. Bitcoin ETFs are expected to launch in Hong Kong by March. South Korea and Indonesia are also rumored to be exploring the option.