What to Anticipate on Day One as Bitcoin ETFs Launch in the United States
The long-awaited moment has finally arrived in the world of cryptocurrency, as spot bitcoin Exchange-Traded Funds (ETFs) have received approval and are ready to launch in the United States. This landmark decision by the Securities and Exchange Commission (SEC) opens up new opportunities for both retail investors and traditional financial institutions to participate in Bitcoin’s price movements. In this article, we will explore what to expect on the first day of trading for these spot bitcoin ETFs.
After ten years of effort and numerous proposals, the SEC has granted approval for spot bitcoin ETFs. These revolutionary products are expected to debut on major U.S. markets, including the NYSE, Cboe Global Markets, and Nasdaq. Notably, trading could begin as early as 4 a.m. ET, marking a significant change in the accessibility of cryptocurrency for a wider audience.
One of the key features of these spot bitcoin ETFs is that they will make it easier for almost any retail customer to gain exposure to Bitcoin’s price. Conventional brokerage apps and accounts can now facilitate this access, eliminating the need to navigate the complexities of cryptocurrency exchanges. Traditional financial institutions also stand to benefit as they can invest directly without relying on crypto exchanges.
It is important to differentiate spot bitcoin ETFs from the bitcoin futures ETFs that were approved in 2021. While the latter invest in derivatives, spot ETFs provide direct exposure to the digital asset itself. Cynthia Lo Bessette, Head of Digital Asset Management at Fidelity, one of the issuers of bitcoin ETFs, emphasized the significance of this development in offering investors more choices and secure access to the market.
The approval of 11 spot bitcoin ETFs has generated significant interest, with billions of dollars already lined up for investment. Liquidity providers and market makers have been diligently preparing to ensure the efficiency of the bitcoin market on the first day of trading. Douglas Yones, NYSE’s Head of Exchange Traded Products, highlighted the presence of numerous market makers ready to provide liquidity and ensure a robust price-discovery process.
Major asset management giant BlackRock has partnered with Coinbase to enhance its portfolio management tools for bitcoin ETFs, demonstrating their long-term commitment to this space. BlackRock has disclosed a $100,000 seed investment, indicating that major financial institutions see this as a strategic move in the evolving cryptocurrency landscape.
While there is anticipation and excitement surrounding the launch of spot bitcoin ETFs, some industry experts predict a gradual increase in interest and investments. David Mann, Franklin Templeton’s Head of ETF Products and Capital Markets, points out that investors may take their time to become comfortable with the ETF vehicle. This cautious approach, characterized by suitability conversations and education, may extend over weeks or even months.