SEC Grants Approval for 11 Spot Bitcoin ETFs, Trading Expected to Begin Soon

• The SEC has approved 11 spot Bitcoin ETFs, allowing issuers like BlackRock, Grayscale, and Fidelity to proceed with trading upon S-1 approval.
• ETF issuers, including VanEck and Bitwise, have secured seed funding, and Pantera Capital has expressed interest in a $200 million investment.
• A competitive fee structure has emerged, with Bitwise offering zero fees initially while others set fees ranging from 0.2% to 1.5%.

The U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin exchange-traded funds (ETFs) by fast-tracking their review process. An SEC website post containing the approval document verifies that issuers such as Bitwise, Grayscale, Hashdex BlackRock Valkyrie BZX, Invesco, VanEck WisdomTree, Fidelity, and Franklin can proceed with their applications.

Approval Process and Regulatory Considerations

The SEC determined that the proposals align with the Exchange Act and applicable regulations governing national securities exchanges. The approval document states that fraud or manipulation in spot Bitcoin markets would likely affect Bitcoin futures in a similar manner. 

Following approval, Grayscale confirmed that it had received the necessary regulatory clearance to uplist GBTC to NYSE Arca. The SEC initially removed the document from its website, resulting in a temporary 404 error, before restoring it to the correct location. The commission later confirmed that the filing was accurate.

While the SEC collectively approved the issuers’ 19b-4 forms, trading will commence only after their S-1 forms become effective. The Cboe BZX exchange requested accelerated registration for multiple spot Bitcoin ETFs on the same day. 

Seed Funding and Competitive Fee Structures

Issuers have secured initial capital for their ETFs. VanEck seeded its fund with $72.5 million, Bitwise committed $500,000, and Pantera Capital signaled interest in investing $200 million if approved. BlackRock seeded its ETF with $10 million.

Competition over fees has intensified among issuers. Bitwise set a zero-fee period for the first six months or until assets reach $1 billion, followed by a 0.2% fee. BlackRock maintained an initial 0.2% fee for the first year or until $5 billion in assets, increasing to 0.3% thereafter. Fees across other issuers range up to 1.5%.