In a monumental development, the U.S. is poised to witness the launch of its inaugural spot Bitcoin ETFs (exchange-traded funds), marking a watershed moment for American investors seeking exposure to the 15-year-old cryptocurrency.
Federal regulators have given their seal of approval to the 19b-4 filings submitted by the New York Stock Exchange, Nasdaq, and Cboe Global Markets. This green light grants these markets the permission to list and offer trading in the securities, with the anticipated launch as early as Thursday.
Notable financial giants, including BlackRock, Fidelity, and Grayscale, among others, have been vying to introduce Bitcoin ETFs. Recent announcements, coupled with fee adjustments, hint at an impending fierce competition to attract investors' funds. These are spot ETFs, distinguished by their direct holding of Bitcoin itself, unlike the already-approved Bitcoin futures ETFs, which deal with derivatives contracts tied to BTC.
The SEC's approval follows years of delays and rejections in the pursuit of launching spot Bitcoin ETFs. It comes on the heels of a significant legal setback for the SEC, where the D.C. Circuit Court of Appeals deemed the rejection of Grayscale's attempt to convert its Grayscale Bitcoin Trust (GBTC) into a spot ETF as "arbitrary and capricious."

Advocates for spot Bitcoin ETFs argue that these regulated trading products offer a gateway for institutional and retail clients to access Bitcoin's price movements without the need for direct investments or the setup of digital wallets. ETF shares, soon to be available to any U.S. investor with a brokerage account, promise a more accessible avenue into the world of cryptocurrencies.
The SEC's approval in early 2024 seemed increasingly likely toward the end of 2023, following a series of meetings and amendments to ETF S-1 filings. The final 19b-4 submissions from NYSE Arca, Cboe BZX, and Nasdaq align with the amended filings from ETF issuers like Galaxy/Invesco, Ark, and Franklin Templeton.
Brokerages such as Fidelity and E-Trade have started adding tickers tied to these ETFs on their platforms. The optimism surrounding spot ETFs has propelled Bitcoin's price from around $27,000 on Oct 1 to over $45,000 at the start of 2024.
As the crypto community eagerly anticipates this groundbreaking launch, shares of the Grayscale Bitcoin Trust (GBTC), now granted conversion into an ETF, surged to $40, its highest price since December 2021.
Jenn Rosenthal, VP for Communications at Grayscale, confirmed regulatory approvals for the uplisting of GBTC to NYSE Arca, signaling another milestone in the evolving crypto landscape.
In a surprising turn, the SEC initially published and subsequently removed an order approving the U.S.'s first spot Bitcoin ETFs on Wednesday, adding an element of intrigue to this historic development.
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As I waited with the rest of the world for the first bitcoin ETF to be approved, one thing has been gnawing at me: With a handful of exceptions including Fidelity and VanEck, nearly every applicant for a spot bitcoin ETF intends to use Coinbase as its custodian.David Schwed is chief operating officer of Halborn.As a cybersecurity leader focused on blockchains, this concentration of risk along with the inherently high-risk nature of crypto custodianship and the still-evolving nature of security best practices gives me pause.It’s not Coinbase itself that worries me here. The firm has never been hit by a known hack, which explains why so many traditional institutions trust its know-how. However, there is no such thing as an unhackable target – anything and anyone can be compromised, given enough time and resources, which is a lesson I've learned over a career at the intersection of cybersecurity and asset management.What worries me is the extreme asset concentration in a single custodian. And given the cash-like nature of crypto assets, that makes the situation inherently concerning.See also: Gary Gensler's Bitcoin ETF Clown ShowIt may be time to rethink the “qualified custodian” designation, a regulatory sign-off which in its current form doesn’t necessarily ensure risky blockchain-based assets are necessarily (or best) secured. Further, ideally, digital asset custodians should be subject to more oversight by better-trained regulators, under more rigorous state and federal standards, than they are right now.Most qualified custodians today secure equities, bonds or digitally tracked fiat balances, all of which are fundamentally legal agreements, which can’t simply be “stolen.” But bitcoin [BTC], like cash and gold, is what’s known as a bearer instrument. A successful crypto hack is like a bank robbery in the Wild West, as soon as it’s in the hands of a thief, the money is simply gone.So for a crypto custodian, one mistake is all it takes for the assets to disappear entirely.We also know the forces of global crypto-crime are formidable and determined. To pick just one notorious example, North Korea’s Lazarus Group hacking cohort is believed to have stolen $3 billion worth of crypto over the past six years, and it shows no signs of stopping. Inflows to a bitcoin ETF have been projected at somewhere above $6 billion in the first trading week — making these funds a prime target.If Coinbase winds up with tens of billions in bitcoin sitting in its digital vaults, North Korea can easily organize a $50 million operation to steal those funds, even if it takes multiple years. Threat actors like Russia’s Cozy Bear/APT29 group might also find going after institutional crypto increasingly appealing as those pools get bigger — potentially much, much bigger.This is the level of threat that major banks prepare for. One widespread model of risk management for financial institutions utilizes three layers of oversight. First, the business management layer designs and implements security practices; second, the risk layer oversees and evaluates those practices; and third, the audit layer makes sure that risk mitigation practices are actually effective.On top of that, a legacy financial institution will have external auditors and external IT oversight, as well as numerous state and federal regulators looking over their shoulders. Many, many eyes will examine every aspect of risk and security.But these multiple levels of redundancy and nesting failsafes require one deceptively simple thing: headcount.During my time as global head of digital assets technology at BNY Mellon, the investment bank had roughly 50,000 employees, of whom around 1,000 – or 2% – were in security roles. Coinbase, even after recent expansion, has fewer than 5,000 employees. BitGo, also a qualified custodian certified by the State of New York and other jurisdictions, has only a few hundred.This is not to impugn the intentions or skill of any of these organizations or their employees. But real oversight requires redundancy that these new institutions may struggle to provide at a level appropriate for securing tens of billions of dollars in bearer instruments.See also: Bitcoin ETFs: The Bull CaseBefore those numbers get even bigger (and more enticing for the bad guys), it is well past time to refine the cybersecurity standards for qualified custodian designation. Right now, the designation accompanies trust or banking licensing, overseen by state and federal regulators. These are financial regulators largely focused on traditional banking, not cybersecurity experts, and certainly not crypto experts. They understandably focus on balance sheets, legal processes, and other financial operations.But for crypto custodians, those aren’t the only kinds of oversight that matter, or even necessarily the most important. There are no industry-wide standards for cybersecurity and risk management practices by crypto custodians specifically, meaning that “qualified custodian” status isn’t quite as reassuring as it might sound. That exposes not just investors but an entire nascent sector to opaque risk with potentially dire consequences.The approval of a cast of bitcoin ETFs is just the latest step in the continued integration of digital assets into the financial system. You don’t have to trust crypto partisans on that prediction – just ask Blackrock, a legacy giant that championed the ETF. As these developments continue, regulators truly interested in investor protection will focus on adapting to this new world: one in which rigorous cybersecurity standards are just as important to financial stability as honest disclosures and financial audits.#BTC-ETF. #BTCETFS #BTC

On January 10th (according to US time), the SEC officially approved the first-ever listed Bitcoin ETFs in the United States. This marks a pivotal moment for Bitcoin and the entire cryptocurrency industry, valued at $1.7 trillion.The announcement was officially posted on the SEC's website. The regulatory body approved registrations from various entities, including BlackRock, Ark Investments, 21Shares, Fidelity, Invesco, and VanEck, among others. Some of these ETF products are expected to commence trading as early as January 11th.Bitcoin ETFs for spot trading have faced challenges over the past decade. ETFs represent a game-changing factor for Bitcoin, enabling institutional and retail investors to access the world's largest cryptocurrency without the need to directly hold it. This development serves as a significant catalyst for the besieged cryptocurrency industry, marred by a series of scandals.#BTCETFS #InvestorInterest $BTC $ETH $BNB