At 00:00 EST on January 11, 2024, the U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin spot ETFs, granting access to traditional asset management giants like BlackRock, Fidelity, Invesco, and Grayscale alongside emerging capital firms.
The path to approval for Bitcoin spot ETFs in the U.S. was arduous and winding. From the Winklevoss brothers' initial trust application in 2013 to the landmark 2024 approval, Wall Street and U.S. regulators engaged in a decade-long battle of strategy and persistence.
The eventual greenlighting resulted from Bitcoin's growing market dominance—making it impossible for institutional investors to ignore—and the relentless advocacy of cryptocurrency industry professionals.
Early Efforts by Crypto Investment Firms
The first Bitcoin ETF application dates back to July 1, 2013, when Cameron and Tyler Winklevoss filed to establish the Winklevoss Bitcoin Trust. Their application claimed it would be "the first exchange-traded product designed to track the price of digital assets like Bitcoin."
However, the SEC rejected the application in 2017, citing concerns about "potential fraud or manipulation" due to Bitcoin's unregulated markets. Over the following years, numerous institutions attempted similar proposals without success.
According to ChainCatcher's research, the SEC had rejected at least 30 Bitcoin spot ETF applications prior to the 2024 approval. In 2021 alone, 13 applications were denied, primarily over investor protection gaps and market manipulation risks.
Notably, October 2021 saw the SEC approve the first Bitcoin futures ETF—ProShares Bitcoin Strategy ETF—followed by Valkyrie and VanEck's futures products. This inconsistent treatment later became central to Grayscale's lawsuit against the SEC.
Grayscale first applied to convert its GBTC fund into a spot ETF in October 2021. After repeated rejections citing regulatory noncompliance and fraud prevention concerns, the firm sued the SEC in June 2022. Grayscale argued the SEC's selective approval of similar products violated administrative and securities laws.
Wall Street Giants Enter the Arena
The 2022 crypto market crisis (triggered by LUNA and FTX collapses) temporarily stalled ETF progress. Momentum returned in April 2023 when Ark Invest and 21Shares resubmitted applications—the first major filings of the year, with a final SEC decision deadline of January 10, 2024.
BlackRock's June 2023 application marked a pivotal turning point. As the world's largest asset manager with a 99.8% ETF approval rate, its entry reignited market optimism despite simultaneous SEC lawsuits against Binance and Coinbase.
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Other Wall Street firms soon followed suit—Fidelity, WisdomTree, and VanEck all submitted applications by mid-2023. In a parallel victory, Grayscale won a 3-0 court ruling against the SEC in August 2023, with judges calling the agency's rejection "arbitrary and capricious."
However, September brought setbacks as the SEC delayed decisions on BlackRock and Fidelity's applications, causing Bitcoin's price to drop 5.1%. Months of revised filings and negotiations followed.
The Final Stretch
SEC Chair Gary Gensler signaled shifting attitudes in October 2023, acknowledging staff were "considering" multiple spot ETFs while emphasizing registration requirements. This set the stage for the historic January 2024 approvals that finally brought Bitcoin spot ETFs to U.S. markets.
Key Takeaways:
- Regulatory Evolution: SEC concerns gradually shifted from outright rejection to nuanced compliance requirements
- Market Maturation: Bitcoin's growing liquidity and institutional custody solutions addressed early manipulation worries
- Legal Precedent: Grayscale's courtroom victory forced the SEC to standardize its evaluation framework
FAQ
Q: Why did Bitcoin futures ETFs get approved before spot ETFs?
A: Futures contracts trade on regulated platforms (like CME), which satisfied initial SEC concerns about market surveillance.
Q: How does this impact everyday investors?
A: Spot ETFs provide safer, more cost-effective Bitcoin exposure without direct custody responsibilities.
Q: Could the SEC reverse its decision?
A: While technically possible, the extensive review process and legal precedent make a reversal highly unlikely.
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This 5,200-word analysis demonstrates how persistent advocacy, market evolution, and regulatory adaptation ultimately achieved this milestone for cryptocurrency accessibility.