Second time’s the charm. After investors trembled last night over a hack affecting the US Securities and Exchange Commission’s Spot Bitcoin ETF account, a major milestone was reached. The regulator has approved the bitcoin spot ETF product jointly offered by Ark Invest and 21Shares. This marks a significant signal of institutional willingness to back crypto markets, potentially stabilizing and consolidating the asset class in the months ahead. Yet SEC Chairman Gary Gensler cautioned that today’s approval is specific to the ETF itself and should not be interpreted as permission to set listing standards for cryptoactive securities.
Leading digital currencies moved higher on the news. Bitcoin edged into positive territory with a modest 0.6% increase, while Ethereum climbed about 8.35%, Cardano rose roughly 7.56%, and broader markets for leading tokens such as Avalanche, Polygon, and Uniswap posted gains near or above 9%. Solana also advanced, though more moderately, by around 2.45%, and Binance Coin slipped slightly by 0.46%.
The bitcoin spot ETF must satisfy three core requirements. Sponsors are obligated to disclose complete, fair, and accurate information about the products so investors can make informed decisions. The ETFs will be listed and traded on registered national exchanges that adhere to standards designed to prevent fraud and will be closely monitored by the SEC for compliance. Gensler emphasized that the Commission will thoroughly investigate any fraud or manipulation in securities markets, including systems that use social media platforms. Finally, to promote healthy competition, the SEC approved the review of ten additional bitcoin spot ETF applications.
Institutional recognition
The approval of this first spot-price bitcoin ETF is expected to pave the way for a wave of similar proposals, including applications from major asset managers such as BlackRock, Fidelity, WisdomTree, and Invesco. Market watchers will need to wait until the SEC’s decision window closes in March to see how these cases unfold. This step matters for the crypto asset industry because the SEC previously rejected more than twenty bitcoin ETF proposals between 2018 and March 2023. One notable case involved Grayscale, which has since pursued a conversion strategy. Grayscale Bitcoin Trust could become an ETF if approved.
“We are now faced with a new set of demands similar to those we rejected in the past,” Gensler noted, but added that conditions have shifted. The U.S. Court of Appeals for the District of Columbia Circuit overturned Grayscale’s initial rationale, resending the matter to the SEC. With these conditions in mind and the criteria the approved ETF must meet, the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETF shares.
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Meanwhile, the president of the SEC clarified that the approval does not reflect a stance on the status of other crypto assets under federal securities laws, nor does it excuse noncompliance by certain market participants. He emphasized that, even as a general rule, most crypto assets are investment contracts and therefore fall under federal securities laws. In a direct reminder, he underscored that today’s action does not endorse or approve trading platforms or brokers that frequently fail to comply with these laws or have conflicts of interest.
Industry observers welcomed the development. Leif Ferreira, CEO and co-founder of the Spanish exchange Bit2Me, remarked that the move will boost trading volume, add buying pressure to a market with limited supply, and help elevate the credibility and legitimacy of cryptocurrencies overall.