The U.S. Exchange Commission approved 11 spot Bitcoin ETFs, including those of Grayscale, Bitwise, and Hashdex.
This approval will be a game-changer for Bitcoin, giving institutional and investors access to the world's largest cryptocurrency without directly holding it, and giving a major boost to the crypto industry, which has been plagued by a series of scandals.
After the announcement, Bitcoin fluctuated around $46,000.
Ethereum stood above the $2,500 mark for the first time since May 2022, rising more than 7% in a day.
On Tuesday (January 9), a fake post was posted on the social account of the US Trading Commission saying that these had been approved, causing confusion. On Tuesday night, some sources said they didn't expect the apparent hack to disrupt the process of approving Bitcoin.
Josh Gilbert, a market analyst at eTorO, said Tuesday's hack "undoubtedly disrupted the Bitcoin market," but all signs point to the U.S. Trading Commission preparing to approve the products.
Standard Chartered analysts said this week that Bitcoin ETFs could attract $50 billion to $100 billion this year alone, pushing Bitcoin to $100,000. Other analysts say the inflows will be close to $55 billion over five years.
Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities, said: "This is a huge positive for the institutionalization of Bitcoin as an asset class. The approval of the ETF will further legalize Bitcoin. ”
In recent months, Bitcoin has grown by more than 70% in anticipation of the asset's ETF approval. Bitcoin** even surged to around $48,000 after the "fake post" was published, but fell below $45,000 a few minutes later and continued to hover around that level later on Tuesday.
High risk
The green light would mark a 180-degree shift from the U.S. Exchange Commission, which has rejected Bitcoin ETFs for a decade for fear that they are vulnerable to market manipulation. Although U.S. Exchange Commission Chairman Gary Gensler has long said that Bitcoin is not a kind of law and has taken a tough stance on the crypto industry as a whole, he believes that many companies are flouting the law.
Last year, hopes for the U.S. Exchange Commission's final approval of a Bitcoin ETF surged after a federal appeals court ruled that the agency had wrongly rejected Grayscale Investment Trust's application to convert its existing Grayscale Bitcoin Trust** (GBTC) to an ETF.
The issuer also sought to address the issue of market manipulation by arranging for Coinbase Global, the largest cryptocurrency exchange in the United States, to work with two ETF-listed exchanges to monitor the underlying bitcoin market.
Still, some investor advocates have urged the U.S. Exchange Commission not to approve the products, arguing that Bitcoin is still too immature. Gensler himself also warned on Monday on his personal X account that cryptoasset investments "can be extremely risky."
Dennis Kelleher, CEO of Better Markets, said Tuesday's fake tweet highlighted the risks. "This once again shows why Bitcoin is the financial product of choice for criminals around the world. ”