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On January 10, 2023, Bitcoin won a major victory with the approval of a spot Bitcoin ETF by the US and SEC.
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10 Years Since the First Application
More than 10 years have passed since the first application to the Securities and Exchange Commission (SEC). On January 10, 2023, the SEC again approved the first regulated spot Bitcoin exchange-traded fund (ETF).
The approval of the Bitcoin ETF was a historic milestone for crypto, but the road was not smooth.
July 1, 2013 (Bitcoin Spot ETF)
It took 4 years to get this application approved. It all started on July 1, 2013, when Gemini co-founders Cameron and Tyler Winklevoss filed the first application for a spot Bitcoin ETF in the United States. However, despite the twins’ efforts and the back-and-forth with the SEC, the agency ultimately denied the application in 2017.
Everyone agreed: Bitcoin was in no way ready for the mainstream.
Grayscale 2017
In 2017, Grayscale launched an investment vehicle called GBTC, an open-ended, private trust for accredited investors. It had already received approval from the Financial Industry Regulatory Authority (FINRA) to trade publicly in 2015. However, it was not an ETF. Today, it is the first publicly traded Bitcoin fund in the United States and is eventually expected to be converted to a spot-based ETF.
Re-Application: The Winklevoss Brothers
The Winklevoss brothers, not to be deterred by their first rejection by the SEC, made a second attempt to get Bitcoin ETF approval. Again, the SEC denied the application, citing the largely unregulated nature of Bitcoin.
Hopes Always Rested on Canada 2021
For years, many people wondered if a spot ETF approval for Bitcoin could ever be achieved until Canada took the lead. According to Bloomberg ETF analyst Eric Balchunas:
- Fidelity Canada launched a spot Bitcoin ETF in 2021, making them the largest asset manager with a Bitcoin ETF at the time.
Companies Sue the SEC 2022
The companies prepared again and applied to the SEC again in 2022. The companies that applied at that time were:
- SkyBridge
- Fidelity
- Bitwise
- Grayscale
The spot Bitcoin ETF applications from the companies’ managers were again rejected by the SEC. In response, Grayscale Investments filed a lawsuit against the SEC after its application to convert GBTC to a spot-based ETF was denied.
ETF Race 2023
In 2023, asset managers BlackRock and ARK Invest joined the race for a Bitcoin ETF. This further increased the hopes that the new Bitcoin investment vehicle would eventually be approved.
August 29, 2023 was the first turning point. US District Court Judge Neomi Rao of the US Court of Appeals ordered the SEC to accept Grayscale’s petition for review.
This was seen as a victory for Grayscale. While the decision did not guarantee the ultimate listing of Grayscale’s spot Bitcoin ETF, it gave the community hope that a spot Bitcoin ETF was on the way.
SEC Response 2024
There were many disputes between the applicant companies and the SEC. By the beginning of January 2024, everything was ready. All the requested files were in the SEC’s possession in a complete manner. On January 9, the SEC’s official X (Twitter) account posted a message stating that the commission had approved the spot BTC ETF applications. However, SEC Chairman Gary Gensler immediately denied the announcement, saying that the SEC had not yet approved the listing and trading of the ETFs, and said that the SEC’s X account had been hacked.
January 10, the Final Day (Bitcoin ETF)
On January 10, Cboe BZX Exchange submitted a letter to the SEC. The letter stated that the BTC ETF proposals for the companies:
- ARK 21Shares
- Invesco Galaxy
- Fidelity
- VanEck
- WisdomTree
- Franklin Templeton
had been approved. At this time, the SEC’s full approval was still pending. This fueled speculation that the SEC could approve multiple proposals from asset managers at the same time.
Approval Time
On the same day, the SEC finally approved the 19b-4 applications from the asset managers. This paved the way for the first regulated spot.