The long-awaited day is finally here. Yesterday, the U.S. Securities and Exchange Commission (SEC) announced that it had approved the listing and trading of 11 spot Bitcoin (BTC-USD) exchange-traded products (ETPs), such as exchange-traded funds (ETFs). This greenlit the way for BlackRock (NYSE:BLK) to begin trading of its iShares Bitcoin Trust (NASDAQ:IBIT) ETF, which became active as of this morning.
While the SEC approved several Bitcoin ETPs, it was adamant that the approval was not an approval for Bitcoin in general:
“It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities,” said the SEC in regards to its Bitcoin ETP approval. “Nor does the approval signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws or about the current state of non-compliance of certain crypto asset market participants with the federal securities laws.”
The announcement comes after the SEC’s X (formerly Twitter) account was hacked earlier this week. The hacker published a post saying that Bitcoin ETFs were approved, which resulted in Bitcoin surging higher.
The IBIT ETF soared higher by over 25% on strong volume during pre-market trading as investors rushed to grab a position in the new asset.
IBIT ETF Alert: 7 Things to Know as BlackRock’s Bitcoin ETF Starts Trading
- The IBIT ETF allows investors to take advantage of Bitcoin’s price action without actually owning the cryptocurrency.
- “IBIT can help remove operational burdens associated with holding bitcoin directly, as well as potentially high trading costs and tax reporting complexities,” said BlackRock.
- Anyone with a brokerage account can now access Bitcoin indirectly.
- The ETF carries a sponsor’s fee of 0.25%.
- However, the fee will only be 0.12% for the first 12 months of trading as long as IBIT’s net asset value (NAV) remains under $5 billion.
- If IBIT’s NAV exceeds $5 billion during the first 12 months, then the portion above $5 billion will be charged a sponsor’s fee of 0.25%.
- There were a total of 400,000 IBIT shares outstanding as of Jan. 10.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
