Finally the day and time has arrives for SEC announce their approval of multiple applications for spot Bitcoin ETFs. The topic of whether SEC would approve Bitcoin spot ETF applications at the beginning of the new year or how soon it could happen has been one of the main topics in crypto and finance for months now. SEC's overall attitude and actions towards crypto have not been super friendly. The agency had took many active actions to make it difficult for crypto firms and exchanges to operate, not only in the US but also around the world. Many of the litigations SEC brought forward failed, but their actions did continue creating obstacles and confusion in crypto. Bitcoin spot ETF in the US was unlikely to happen in many people's mind, until BlackRock showed interest. After BlackRock announced their interest in bitcoin and their plans to create an bitcoin spot ETF, opinions shifted drastically. Because BlackRock is a giant in money management, investment and finance world, and because BlackRock has impressive record of receiving approvals from SEC, the consensus among analyst and opinionated ones was Bitcoin spot ETF would happen sooner than it was expected before BlackRock entered the space.
For months many predicted ETF was definitely going to happen soon. Those who expected the opposite have been in minority. Despite such agreement, or maybe disagreement at times, bitcoin's price didn't really react to the rumor or the news now. Yes, bitcoin's price did well in 2023. But this wasn't anything near to what bitcoin has done in past like in 2021, 2017, and even before. Bitcoin has proven many times in the past that it always breaks its previous all time highs and doesn't take too long to do so either. With bitcoin spot ETF being a huge deal, I have been surprised with how it wasn't able to reach its previous all time high during rumor period, nor has it done after today's SEC announcement. Perhaps, more enthusiasm will come to price action after ETF start trading.
It is debatable wether big money managers and investment firms getting into the space is good for ordinary people or bitcoin. This was inevitable. Sooner or later it was going to happen. I would choose sooner. I am glad the speculation around ETF approvals is over now. This chapter in bitcoin's history is closed, and the new one begins. Time will show actually bitcoin spot ETF will impact bitcoin as a technology, investment instrument, and revolutionary idea. In theory, spot bitcoin ETFs is a great news. Now this opens up the opportunity to participate in bitcoin as investment for many institutions, and even individuals who couldn't do so before. While buying bitcoin in exchanges has been an option for many years now, institutions wouldn't be able to allocate any funds to such investment according to their charter, rules, and laws. Even some individual investors wouldn't want to risk their money and keep them in exchanges or even have self-custody of assets due to many many losses of funds by exchanges and people losing keys to wallets. For such investors bitcoin spot ETFs might be the perfect options they have been waiting for.
Bitcoin is a globally recognized brand. For some of us it is a revolutionary idea to creates perfect incorruptible money and let us reimagine better financial systems, for others it is a magical technology, and for many is a great investment opportunity. Bitcoin has been the best performing asset for years now, it continues to do so. Even those who don't think it has any intrinsic value, they too wouldn't want to miss a chance on such gains. While likes of Chase CEO Jamie Dimon loudly criticizes bitcoin, his bank continues to make plans on how to participate and make money from bitcoin and crypto. It is difficult to believe and trust what SEC says, it is even more difficult to trust or believe banks and their executives. Being dishonest comes to them with ease. Hence, bitcoin - trustless network of money.
SEC has handled the entire process poorly. If I were to grade, I would give them F. While we know from SEC actions in last the couple of years, they haven't been crypto friendly, one thing has been clear for a very long time that SEC did not consider bitcoin to be a security. In my opinion, SEC knew they were ready to approve bitcoin spot ETFs when BlackRock submitted their application. SEC knew they were going to approve spot ETFs when they lost the lawsuit against Grayscale. As a regulatory agency that is tasked to bring more openness and transparency to markets, SEC embraced secrecy. They could have easily introduced clarity months ago without even telling what their final decision was going to be. Simply describing the criteria they are using in decision making, steps they will be taking, and when to expect the final decision. This could have been done easily. Not only they kept building confusion in the last few months around this topic, they failed in properly making the official announcement. There will be movies made about this story. It is as if they were making it easy for writers to come up dramatic moments.
How is that possible for an agency to deals with fraud, crime, corruption not to have their login credential secure for their social media account? I know hackers are very sophisticated nowadays, and manage to pull of hacks in crucial moments. But being hacked because of lack of competence in basics of account security for and agency whose statements move markets is being beyond careless. I am talking about how their X account was accessed by someone unauthorized who has access to the phone number associated with SEC's X account. This hacker or rogue insider was able to publish that SEC officially approves ETFs from SEC's official X account. I admit, it was funny. Movie maker don't omit this moment please. But that also caused liquidations and loss of money for traders. SEC was quick to see this action, removed the announcement, and told everybody what happened. Funny thing is they knew they were planning to announce the following day. Why not just leave the announcement? Sure, tell us that account was hacked. But keep the true news out. Say, we were planning to announce tomorrow, but because of the hack we are doing it now. It's official, bitcoin spot ETFs are approved.
Even the official announcement didn't seem to to as planned. After it was published, it disappeared. Was that due to technical difficulties, many people visiting the website at the same time, or did they just discover a grammatical error or type that had to be fixed. After all this drama, now we all know that bitcoin spot ETFs are approved and trading should start tomorrow. Obviously, we all wonder what will happen, how will it affect the price action. Well, prices go up, prices go down. Bitcoin does its own thing. Usually, bitcoin like to surprise people and do something unexpected. Probably the same will be true tomorrow, next month, and next year.
ETF or no ETF, bitcoin has its own path, its own journey. Bit investors, institutions, or just retail, it doesn't matter. In fact, bitcoin doesn't show favoritism to any. It is an open monetary network, and everybody is welcome to participate. Nothing wrong with banks, money managers, or even governments to participate in the network. They all are encouraged to do so. Nobody is allowed to rig the system to put other participants in disadvantage. Even if they wanted to, protocol wouldn't allow. Will spot ETFs drive more money and recognition for bitcoin. Probably. But that was going to happen regardless. ETFs only offer exposure to bitcoin and may be a good investment. But ETF do not provide all the features bitcoin offers to the investors. Owning the actual bitcoin gives the full features of this money and its network.
Even without ETF approval, 2024 was going to be a great year for bitcoin, at least expected to be. One of the most anticipated events in bitcoin is the halving which should happed mid Spring. If history repeats, bitcoin tends to reach new highs within a year of halving. As bitcoin leads the way, rest of crypto follows, and there may be great opportunities for other decentralized networks to shine as well. Ethereum already makes interesting moves. We have seen other crypto coins eager to reignite the bull market. It is time for Hive to regain its billion dollar market cap, make some noise, and let more people to benefit from the network.
Hopefully, bitcoin spot ETF talk is over now. At least the part the involves SEC. Hopefully, focus will shift to more meaningful things going forward. It is time for SEC to engage in more meaningful activities like creating clear guidelines, and offering solutions, instead of being an obstacle.