10 Years of Waiting for the Bitcoin ETF by the Crypto Community

The first Bitcoin ETF application was submitted in the US on July 1, 2013, and was rejected after four years, but the cryptocurrency community did not give up.

January 11 became one of the most memorable days in the cryptocurrency field as the first Bitcoin ETF exchange-traded funds were listed on the US stock exchange. The event paved the way for investors to access Bitcoin without needing to buy directly. Instead, they purchase shares of the ETF fund, with the assets backed by the Bitcoin holdings of the fund.

Analysts believe this is a significant milestone for cryptocurrency as the journey to this point has not been easy. The journey began on July 1, 2013, when the Winklevoss twins, Cameron and Tyler Winklevoss, co-founders of Gemini, filed the first application for a Bitcoin ETF in the US. The application was reviewed multiple times. By 2017, the US Securities and Exchange Commission (SEC) decided to reject it. At that time, financial experts and the media said Bitcoin was not ready for a new era.

The Winklevoss brothers remained persistent. In 2018, they sought a second opportunity. This time, the SEC continued to push it aside, citing that a significant portion of Bitcoin was not under control.

Many years later, the cryptocurrency community still hopes that the Bitcoin ETF will be accepted and listed on the stock exchange. This means Bitcoin would be recognized as an asset, managed by regulations rather than being seen solely as a speculative tool.

In 2021, Canada surprised the market when Fidelity Canada launched the first Bitcoin ETF exchange-traded fund. Bloomberg analyst Eric Balchunas evaluated this move, making Fidelity the largest asset manager with a Bitcoin ETF at the time. The progress in Canada gave the community hope for new developments in the US. In 2022, a series of applications from major asset managers like SkyBridge, Fidelity, Bitwise, and Grayscale continued to be submitted to the SEC but without success.

At this point, Grayscale Investments, an investment fund, decided to sue the SEC after being rejected. The lawsuit dragged on, and on August 29, 2023, Judge Neomi Rao of the US Court of Appeals ordered the SEC to approve Grayscale's application. This didn't guarantee Grayscale's request would be accepted but reignited hopes for the implementation of the Bitcoin ETF. During this time, major funds like BlackRock and ARK continued to submit applications to the SEC.

At the beginning of January, ETF issuing organizations announced they had completed the application process, awaiting a response from the SEC. On January 9, the SEC's X account posted a notice that the Commission had approved the application for the Bitcoin ETF. However, just a few minutes later, SEC Chairman Gary Gensler dismissed the information, saying the SEC's X account had been hacked.

It wasn't until January 10 that this became a reality, and a day later, the funds were officially listed. According to Reuters, this was a turning point for Bitcoin specifically and the broader cryptocurrency industry. Listing became a game-changer for Bitcoin as it was recognized as a legitimate investment asset, managed on par with gold.

Cointelegraph cited research from ETF providers showing that if just three investment funds, BlackRock, Invesco, and ARK, achieved their goals, within 12 months, they could bring an additional $11 billion to the Bitcoin market.

The question is whether the SEC's approval of the Bitcoin ETF will compete with existing cryptocurrency exchanges. The answer is no. Billions of dollars from traditional markets will be absorbed by the Bitcoin ETF, along with increasing interest from investors in this new asset class. Many will turn to exchanges. Leading companies like Coinbase will benefit from the expansion of the cryptocurrency community.

However, on the flip side, SEC approval means increased legal pressure on the cryptocurrency ecosystem. The community may no longer witness short-term price surges. The market will be more tightly regulated by traditional financial institutions. In the past 24 hours, the price of Bitcoin has not risen as expected, even dropping from $48.9 thousand to $46 thousand USD.

Lucas Kiely, Chief Investment Officer of Yield App, said on Cointelegraph: "Legal pressure may even cause the price of Bitcoin to fall. The global economic context will also contribute to shaping the price. However, by 2024, Bitcoin will finally become the dominant trend."

Andrey Stoychev, Project Director at cryptocurrency brokerage firm Nexo, believes that news of the SEC approving the Bitcoin ETF will help the digital currency rise in price, although it may decline in the short term.

"Remember the 2013 period when gold ETF funds were approved. The market went through a short-term correction, but then the reality proved that the price of gold always rises. Bitcoin will surely reach its all-time high. The approved ETF is a guarantee for long-term development," Stoychev said.

Oliver Linch, CEO of cryptocurrency exchange Bittrex Global, said: "The approval of the Bitcoin ETF opens up new regulatory compliance avenues for investors to access the cryptocurrency market. Experts expect a large influx of capital into these ETF funds as they begin trading publicly, marking a milestone in Bitcoin's history."

Data collected by Cointelegraph showed that just minutes after the Bitcoin ETFs were listed, $1.6 billion was processed. At the end of the first day, the total trading volume reached $4.5 billion USD. However, analysts note that trading volume and capital inflows do not paint a complete picture of Bitcoin buying and selling proportions on the day.