Crypto prices soar as SEC approves spot Bitcoin ETFs
Bitcoin has surged past US$47,000, and Ethereum jumped over 10% in value after receiving regulatory approval from the United States Securities and Exchange Commission (SEC) to launch spot bitcoin exchange-traded funds (ETFs). This decision is expected to unlock billions of dollars in inflows into the world's largest digital currency.
As of now, Bitcoin is trading at a 2.9% increase, reaching approximately US$47,412, and this momentum has had a ripple effect on other cryptocurrencies. Ethereum, the second-largest cryptocurrency by market capitalisation, experienced a remarkable 10.2% gain, trading at US$2,579.3. Other cryptocurrencies like XRP, Solana, and Cardano also saw a positive response to the SEC's decision, with their prices rallying.
Australian cryptocurrency exchange Swyftx reported that early trading volumes had surged by more than 80%. Furthermore, Bitcoin trade volumes on the exchange in the fourth quarter nearly doubled compared to the same period the previous year.
Jason Titman, Chief Operating Officer at Swyftx, commented on the development, stating, "Local investors clearly believe the ETF approvals are a landmark event that will drive significant additional demand. You don't need to be an existing Bitcoin user to understand the importance of it controlling a place in Wall Street portfolios. We think it unlikely the market will get upended overnight, but signals are important, and this is a significant institutional vote of confidence in the future of digital assets."
Several industry experts and stakeholders have shared their thoughts on this long-awaited approval:
Evan Metcalf, Chief Executive of Global X ETFs in Australia: "This not only reflects a significant milestone for the cryptocurrency sector but also signals a growing vote of confidence from regulatory authorities abroad. It is encouraging to witness a growing recognition of digital assets as a legitimate investment class, and we anticipate heightened demand for this type of exposure from investors, particularly here in Australia. The notable rallies of Bitcoin and Ethereum this year further underscore this growth potential."
Brett Tejpaul, Head of Coinbase Institutional: "The evolution of cryptocurrency goes beyond mere acceptance; it transforms into a dynamic force updating the century-old financial system. As the utility of crypto expands, so does its significance – from a novel asset class to a catalyst for groundbreaking innovations. With major asset managers bringing the world of digital assets to millions through this regulated product, these ETFs are set to catalyze industry growth, unlocking trillions in new capital."
Justin Arzadon, Head of Digital Assets at Betashares: "The anticipated flows into US-traded spot bitcoin ETFs in the initial days after launch are expected to be significant and would serve as an endorsement of the global investor preference for ETFs over other investing structures. Specifically for Bitcoin, it removes the need to directly navigate issues related to storage and safekeeping, as well as providing buying options beyond unregulated exchanges. The move may also provide a long-term tailwind to the companies which service the crypto ecosystem. The so-called 'picks and shovels' of the crypto economy will perhaps see higher demand for many of their services as traditional finance moves deeper into the sector."
The SEC's decision to greenlight spot bitcoin ETFs marks a pivotal moment in the cryptocurrency market's journey towards mainstream acceptance. It is expected that this approval will have a profound impact on the market, attracting significant investment and further solidifying digital assets as a legitimate and attractive investment class. As cryptocurrency adoption continues to expand, it is evident that the industry is evolving rapidly, reshaping the global financial landscape for years to come.
Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.