- The new Bitcoin ETFs approved by the US Securities and Exchange Commission (SEC) have garnered over $4.2 billion in net new flows by mid-February.
- These ETFs enable investors to gain exposure to Bitcoin without needing to directly purchase and store the cryptocurrency themselves.
- The ETFs purchase and hold enough Bitcoin to back the shares they issue, working with authorized participants and market makers to create and redeem shares as needed.
- Despite concerns from regulators about liquidity, manipulation, and Bitcoin's volatility, spot Bitcoin ETFs have demonstrated strong performance.
- Issuers are now exploring other cryptocurrencies for potential spot ETFs, with Ether and XRP being considered as prominent candidates.
- BlackRock and Franklin Templeton have already submitted applications for a spot Ether ETF.
