The crypto market witnessed a historic moment on Jan. 10, 2024, when the US Securities and Exchange Commission (SEC) approved 11 new spot Bitcoin ETFs, allowing investors to gain direct exposure to the leading cryptocurrency. This development marks a significant shift from the previous norm, where ETFs were limited to holding Bitcoin futures contracts, which often resulted in higher fees and tracking errors. The approval of spot Bitcoin ETFs in the US, the world’s largest ETF market, is expected to boost the adoption and liquidity of Bitcoin, as well as pave the way for more innovation and regulation in the crypto space.

US Takes the Lead in Spot Bitcoin ETF Market

The US now represents an overwhelming 83.3% of the $41.74 billion global spot Bitcoin ETF market, surpassing Canada, which had previously led with 46.3% in market share. Canada was the first country to approve spot Bitcoin ETFs in February 2023, followed by Brazil, Germany, Switzerland, and the UK. However, none of these countries could match the scale and demand of the US market, which saw a trading volume surge to $4.6 billion on the first day of trading for the new ETFs. Bitcoin itself reached a peak of $48,922 during the trading frenzy, reflecting the market’s enthusiastic response to this historic decision.

The US approval of spot Bitcoin ETFs was preceded by a landmark legal victory by Grayscale Investments, the largest digital asset manager in the world. Grayscale had filed a lawsuit against the SEC in 2023, challenging its rejection of its spot Bitcoin ETF application. In December 2023, a federal judge ruled in favor of Grayscale, finding that the SEC had acted arbitrarily and capriciously in denying its application. The SEC decided not to appeal the ruling, paving the way for Grayscale to convert its popular Bitcoin Trust (GBTC) into an ETF, as well as for other ETF providers to amend their prospectuses and seek approval for spot products.

A Diverse Range of Spot Bitcoin ETFs to Choose From

Investors now have a diverse range of spot Bitcoin ETFs to choose from, each with different features and fee structures. Here is a comprehensive list of all the new Bitcoin ETFs approved by the SEC that are available for trading:

• Grayscale Bitcoin Trust ETF (GBTC): The largest and oldest Bitcoin ETF, with over $30 billion in assets under management (AUM),. It charges a 1.5% annual fee and trades on the NYSE Arca.
• Hashdex Bitcoin Futures ETF (DEFI): The first Bitcoin ETF to use a hybrid approach of holding both spot and futures contracts, aiming to reduce the risk of contango and tracking error. It charges a 0.9% annual fee and trades on the Nasdaq.
• Franklin Bitcoin ETF (EZBC): The first Bitcoin ETF to offer a zero fee for the first $10 billion in AUM, or until Aug. 2, 2024, whichever comes first. After that, it will charge a 0.19% annual fee and trade on the Cboe BZX Exchange.
• VanEck Bitcoin Trust (HODL): the first Bitcoin ETF to use the ticker symbol HODL, a popular term among crypto enthusiasts meaning to hold on to one’s coins for the long term. It charges a 0.25% annual fee and trades on the Cboe BZX Exchange.
• iShares Bitcoin Trust (IBIT): The first Bitcoin ETF from the world’s largest ETF provider, BlackRock. It offers a 12-month fee waiver for the first $5 billion in AUM, after which it will charge a 0.25% annual fee and trade on the NYSE Arca.
• Valkyrie Bitcoin Fund (BRRR): The first Bitcoin ETF to use the ticker symbol BRRR, a meme-inspired term referring to the sound of a money printer. It offers a three-month fee waiver, after which it will charge a 0.25% annual fee and trade on the NYSE Arca.
• Invesco Galaxy Bitcoin ETF (BTCO): The first Bitcoin ETF to partner with Galaxy Digital, a leading crypto asset manager and investment firm founded by Mike Novogratz. It offers a six-month fee waiver for the first $5 billion in AUM, after which it will charge a 0.39% annual fee and trade on the NYSE Arca.
• WisdomTree Bitcoin Fund (BTCW): The first Bitcoin ETF from WisdomTree, a pioneer in thematic and smart beta ETFs. It offers a six-month fee waiver for the first $1 billion in AUM, after which it will charge a 0.3% annual fee and trade on the Cboe BZX Exchange.
• Fidelity Wise Origin Bitcoin Fund (FBTC): The first Bitcoin ETF from Fidelity, one of the largest and most trusted asset managers in the world. It offers a fee waiver until Aug. 1, 2024, after which it will charge a 0.25% annual fee and trade on the Cboe BZX Exchange.
• Ark 21Shares Bitcoin ETF (ARKB): The first Bitcoin ETF from Ark Invest, a leading innovator in disruptive and thematic ETFs led by Cathie Wood. It offers a fee waiver until six months or $1 billion in AUM, whichever comes first, after which it will charge a 0.21% annual fee and trade on the Cboe BZX Exchange.
• Bitwise Bitcoin ETF (BITB): The first Bitcoin ETF from Bitwise, a pioneer in crypto index funds and research. It offers a six-month fee waiver for the first $1 billion in AUM, after which it will charge a 0.2% annual fee and trade on the NYSE Arca.

A Bright Future for Bitcoin and Crypto ETFs

The approval of spot Bitcoin ETFs in the US is a major milestone for the crypto industry, as it opens the door for more mainstream adoption, innovation, and regulation. Investors can now access Bitcoin conveniently and cost-effectively without having to worry about the technical and security challenges of buying and storing the cryptocurrency directly. Moreover, the approval of spot Bitcoin ETFs could also pave the way for the approval of other crypto ETFs, such as those based on Ethereum, the second-largest cryptocurrency by market cap, or those that track a basket of crypto assets or sectors.

The crypto ETF market is expected to grow rapidly in the coming years as more investors seek exposure to this emerging and disruptive asset class. According to a recent report by ETFGI, a research firm, crypto ETFs listed worldwide attracted year-to-date net inflows of $1.6 billion, with a significant portion—$1.31 billion—added in November 2023 alone. Notably, this cumulative investment nearly doubles the $750 million net inflows into crypto exchange-traded products (ETPs) in 2022. The report also projects that the global crypto ETP market could surpass $50 billion by the end of 2024, driven by the US approval of spot Bitcoin ETFs and the growing demand for crypto exposure.