2016: The Winklevoss brothers refine their application, specifying the exchange where the product would be traded and amending it to name State Street as administrator. Grayscale submits an application to convert its Bitcoin trust into a spot Bitcoin ETF.
2017: The SEC rejects the Winklevoss application, citing concerns about the maturity of Bitcoin markets. Grayscale withdraws its initial attempt to convert its trust into an ETF, citing a lack of regulatory clarity.
2020: Grayscale transforms its Bitcoin trust into an SEC-reporting entity. This allows its shares to trade on the over-the-counter market, known as the “pink sheets.” While not an ETF, it becomes the first publicly traded Bitcoin fund in the U.S.
October 2021: The SEC approves the ProShares Bitcoin Trust, listed on the Chicago Mercantile Exchange (CME), marking the first U.S.-listed futures-based Bitcoin ETF. It quickly accumulates over $1 billion in assets, setting a record for the fastest asset accumulation for any ETF.
– 2021: The first U.S.-listed Bitcoin ETF, the ProShares Bitcoin Strategy ETF, is launched.
– 2023: SEC Approves the 2x Bitcoin Strategy ETF from Volatility Shares.
– 2023: @Grayscale wins appeal against the SEC to convert Bitcoin Trust to ETF.
June 2023:BlackRock files for a spot Bitcoin ETF application with the SEC, raising hopes of regulatory approval and sending Bitcoin’s price to a one-year high. A flurry of other issuers, including Fidelity and Invesco, follow suit in the subsequent weeks and months.
— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) July 15, 2023
August 2023: A federal appeals court in Washington D.C. rules in favor of Grayscale. It finds that the SEC failed to adequately justify its rejection of the company’s spot Bitcoin ETF application. Europe’s first spot Bitcoin ETF begins trading on the Euronext Amsterdam stock exchange.
January 10, 2024: In a landmark decision, the SEC approves 11 proposals from issuers including BlackRock, Fidelity, and VanEck to launch spot Bitcoin ETFs. This marks a significant step in the legitimization of Bitcoin as an investment asset and opens up the door for broader institutional adoption of the cryptocurrency.
Bitcoin ETFs Will Expand BTC Adoption, Not Replace Existing Methods
The launch of Bitcoin ETFs has sparked debate about their potential impact on existing methods of accessing Bitcoin, such as Coinbase and cold wallets. Some argue that ETFs will simply cannibalize these other avenues, while others believe they will attract new investors and expand Bitcoin adoption overall.
Historical parallels suggest the latter scenario is more likely. According to Matt Hougan, CIO at Bitwise Investments and former CEO of ETF.com, when gold ETFs first emerged, many feared they would compete with traditional gold ownership methods, such as bars and coins. However, the opposite occurred. Demand for physical gold surged, tripling from 293 tonnes in 2003 to 1,107 tonnes in 2022.
In a document shared with CCN.com, Hougan explains that the reason for this unexpected outcome was straightforward: the ETF launch helped legitimize gold as a mainstream investment, attracting a wider pool of investors. While some opted for ETFs, others still preferred physical gold ownership.
Hougan expects a similar dynamic with Bitcoin ETFs.
He said: “I suspect we’ll see the same thing here. Many investors will find their way to bitcoin ETFs, even as the number of investors accessing bitcoin through Coinbase and holding it in cold wallets soars. There will likely be some cannibalization, but I suspect the pie will grow so much that no one will care.”
In essence, the launch of Bitcoin ETFs is not about replacing existing methods. Rather, it could be about growing Bitcoin’s reach and accessibility to a wider range of investors. Just as gold ETFs expanded gold’s influence, Bitcoin ETFs could do the same for Bitcoin, making it an even more prominent player in the financial world.
Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear.
Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3.
An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.