Bitcoin soared just now after the SEC made a post on its X (formerly Twitter) account saying that it had (finally) approved the creation of Bitcoin ETFs.
The problem: the SEC account had been hacked, and it was all fake news .
The price spike was short-lived, but it must have been enough for someone to make a lot of money from the trade .
It wasn’t today, but the market expectation is that the SEC will approve the creation of Bitcoin ETFs this week — putting an end to a wait that has lasted years.
In 2021, the regulatory agency had already approved Bitcoin futures ETFs — but has so far resisted approving cryptocurrency spot ETFs.
The argument is that there is no neutral Bitcoin price signaling environment. In plain English: the SEC considers that there is no exchange that it can trust 100% to serve as a reference.
The SEC’s refusal created a fight that ended up in court in the middle of last year, after dozens of managers filed requests to create their ETFs. The expectation for SEC approval is such that, last week, these managers began sending filings detailing the fee they intend to charge on these products, according to Barron’s.
Fidelity, for example, said it intends to charge a 0.39% management fee for its Wise Origin Bitcoin Fund ETF. Invesco and Galaxy, which want to launch the Invesco Galaxy Bitcoin ETF together, intend to charge 0.59%.
The expectation of approval of the Bitcoin ETF has boosted the cryptocurrency’s price in recent months, with many investors predicting that the release could attract a new investor profile to this market, boosting demand for the cryptocurrency.
The market’s belief that approval is just a matter of time has also increased the shares of some closed-end Bitcoin funds, such as the Grayscale Bitcoin Trust (GBTS) and the Grayscale Ethereum Trust (ETHE), both managed by Galaxy, the manager of the Billionaire Mike Novogratz, a former Goldman Sachs trader.
A year ago, these funds traded at a discount of around 40% compared to the price of Bitcoin — partly due to the high fees of a closed-end fund, and partly due to the manager’s governance risks.
With the expectation of converting these funds into ETFs, this gap gradually closed and today it is already in the 6% range — a number that tends to converge to zero.
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