The SEC’s ETF Enigma: A Timeline of Hopes, Disappointments, and Price Swings

11.01.2024 Update

A Historic Milestone – SEC Approves First Bitcoin ETF

In a landmark decision, the U.S. Securities and Exchange Commission (SEC) has finally approved the first Bitcoin Exchange-Traded Fund (ETF), marking a historic moment in the cryptocurrency space. This approval, as reported by The Guardian and confirmed by the official statement on the SEC’s website, represents a significant shift in the regulatory landscape.

This decision comes after years of anticipation and numerous setbacks, as detailed in our earlier timeline. The approval is poised to potentially change the dynamics of cryptocurrency investment, offering a more mainstream and regulated avenue for investors.

SEC Chairman Gary Gensler’s statement highlights the importance of investor protection and market integrity in this decision. This breakthrough could pave the way for more cryptocurrency-based investment products and signal a growing acceptance of digital assets in the traditional financial system.

This is a momentous occasion for the cryptocurrency community and investors, signalling a new era of legitimacy and potential growth for Bitcoin and the broader crypto market.

Read more about the SEC’s statement here.

А little background:

The rollercoaster journey of Bitcoin ETFs, from early hopes and dashed dreams to the recent eyebrow-raising tweet from a seemingly compromised SEC account. It has been a fascinating saga intertwined with regulatory decisions and price swings. This article will provide a comprehensive timeline of these major events and their impact on Bitcoin’s price, highlighting the SEC’s cautious approach towards approving spot Bitcoin ETFs and the crypto community’s anticipation for further developments in this space.

Embark on a journey through the evolving landscape of Bitcoin ETFs, delving into the most pivotal events and ETF news that have shaped its trajectory, from early aspirations to the most recent developments.

2013: The concept of a Bitcoin ETF begins to gain attention. The Winklevoss twins, known for their involvement in the early development of Facebook, file with the U.S. Securities and Exchange Commission (SEC) to create the first Bitcoin ETF, the Winklevoss Bitcoin Trust.

2017: The SEC rejects the Winklevoss Bitcoin ETF proposal, citing concerns about the lack of regulation and potential for fraud within the Bitcoin market.

2018-2019: Several firms, including Bitwise Asset Management and VanEck, file proposals for Bitcoin ETFs. These proposals are either withdrawn or rejected by the SEC, largely due to ongoing concerns about market manipulation and regulatory compliance.

2020: The interest in Bitcoin ETFs continues to grow alongside the increasing institutional acceptance of Bitcoin. However, the SEC continues to express concerns and has not yet approved any Bitcoin ETFs in the United States.

2021: Canada approves the first North American Bitcoin ETFs, including the Purpose Bitcoin ETF, which sees significant interest from investors. This development increases pressure on the U.S. SEC to consider approving Bitcoin ETFs.

2021: In the U.S., the SEC approves the first Bitcoin futures ETFs, allowing investors to speculate on the future price of Bitcoin without directly owning the cryptocurrency. This is seen as a significant step towards the potential approval of a spot Bitcoin ETF.

2022: Turning point in the long-awaited journey of Bitcoin ETFs

• October 4: SEC announces that it is considering approving a Bitcoin spot ETF. The announcement marks a significant shift in the SEC’s stance on Bitcoin ETFs.
• November 12: SEC delays VanEck Bitcoin ETF review until March 16, 2023. The decision is met with criticism from the crypto community, which argues that the SEC is unfairly delaying approval of spot Bitcoin ETFs.
• December 21: SEC denies Valkyrie Bitcoin ETF application. The decision is met with disappointment from the crypto community, which had hoped that the SEC would finally approve a Bitcoin spot ETF.

2023: The anticipation surrounding Bitcoin ETFs continued to build throughout 2023.

• April 7: Grayscale Investments files lawsuit against SEC, seeking to force it to approve its Bitcoin spot ETF application. The lawsuit alleges that the SEC is arbitrarily delaying approval of spot Bitcoin ETFs and is violating the Administrative Procedure Act.
• January 10: An unknown individual gains access to the SEC’s Twitter account and tweets that the SEC has approved the first Bitcoin spot ETF. The tweet is quickly deleted, and the SEC confirms that the tweet was unauthorized and that no Bitcoin spot ETFs have been approved.
• January 11: The crypto community expresses disappointment and frustration with the SEC’s latest delay in approving a Bitcoin spot ETF.
• April 6: SEC announces that it will hold a public roundtable discussion on Bitcoin ETFs on April 25, 2023. The roundtable is intended to gather input from market participants on the potential for Bitcoin ETFs and the regulatory issues that need to be addressed.
• May 10: SEC releases a Concept Release on Exchange-Traded Products (ETPs), which includes a section on Bitcoin ETFs. The Concept Release seeks public comment on the potential for Bitcoin ETFs and the regulatory framework that would be necessary to support them.
• June 29: SEC extends comment period on several applications for Bitcoin ETFs. The decision is met with mixed reactions, with some arguing that it is a positive sign and others expressing frustration with the SEC’s slow pace on ETF approvals.
  

Yesterday (January 9, 2024): The SEC’s Twitter account was hacked, and a tweet was sent that said the SEC had approved Bitcoin ETFs.

The tweet was quickly deleted, but not before causing a significant stir in the crypto community. The price of Bitcoin briefly spiked to as high as $46,000 in anticipation of the approval, but then quickly fell back down when it was revealed that the tweet was fake.

The hack is a reminder of the potential risks of relying on social media for important news. It is also a setback for the crypto community, which had been hoping for a positive decision from the SEC on Bitcoin ETFs.

Only time will tell when or if the SEC will finally approve a Bitcoin spot ETF, but the crypto community remains hopeful that this will happen in the near future, mostly because we are all getting tired of this SEC-Bitcoin ETF saga.