The regulator has not approved the launch of ETFs tracking the spot price of bitcoin for more than a decade, since back in 2013, twin brothers Tyler and Cameron Winklevoss, now owners of the Gemini cryptocurrency exchange, decided to create the first such fund. In June 2023, the world’s largest management company BlackRock submitted an application for registration of a bitcoin ETF.

The decision in favor of bitcoin funds was made after Grayscale Investments won a key victory over the SEC in court. A federal appeals court has overturned the SEC’s refusal to grant Grayscale’s application to convert its existing bitcoin trust into a full-fledged ETF. The court called the refusal “arbitrary and capricious” because the SEC representatives could not provide convincing arguments in favor of a ban on spot funds. Back in 2021, the SEC approved several ETFs that allow investors to speculate on bitcoin futures, but the shares of such ETFs do not have a direct impact on the bitcoin market.

This was emphasized in a public statement by SEC Chairman Gary Gensler. According to him, it was the Grayscale case that became a turning point for changing the rhetoric of the regulator. However, the agency still “does not approve or support bitcoin itself.” Investors, in his opinion, should be wary of “the numerous risks associated with bitcoin and products whose value is linked to cryptocurrency.”

“Today’s decision does not endorse or support cryptocurrency trading platforms or intermediaries, which for the most part do not comply with federal securities laws and often have a conflict of interest,” Gansler said.

The bitcoin exchange rate reacted to the news of the approval of the ETF with a slight decrease. The price of the second most capitalized cryptocurrency, Ethereum (ETH), on the contrary, increased in anticipation of a positive decision on its ETFs and reached $2,500 for the first time since the spring of 2022. Applications for spot Ethereum ETFs have been under consideration by the SEC since November 2023.

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