Hurray! The U.S. Securities and Exchange Commission (SEC) has approved the first-ever U.S.-listed exchange-traded funds (ETFs) to track bitcoin. This milestone comes exactly 15 years after the historic tweet by Hal Finney, a legendary cypherpunk who was one of the earliest adopters of bitcoin.
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Hal Finney’s Impact on Bitcoin
On January 11, 2009, Hal Finney, a prominent figure in the cypherpunk community, tweeted the words “Running bitcoin,” just days before becoming the first person, after Satoshi Nakamoto, to download and receive bitcoin. Finney’s tweet introduced the world to bitcoin, a then-niche internet token that would later become a trillion-dollar asset at its peak. He was also among the first to estimate the potential value of bitcoin, suggesting that each of the 21 million coins could be worth $10 million as a fraction of global household wealth flowed into the project. Hal Finney died in August, 2014, but will always be remembered as “a longtime futurist who put his programming skills to work in the service of his ideals, particularly his desire to see the privacy of individuals protected.“
Approval of Bitcoin ETFs
After years of delays and rejections, the SEC has finally approved 11 applications for bitcoin ETFs. These ETFs will be offered by renowned financial institutions such as BlackRock, Fidelity, and Ark Investments/21Shares, along with the uplisting of Grayscale’s popular Bitcoin Trust (GBTC) as an ETF. The fees for these products range from zero to 1.5%. The approval of regulated bitcoin ETFs allows investors and funds to gain exposure to bitcoin without the complexities of setting up and managing a cryptocurrency wallet.
It’s a huge positive for the institutionalization of bitcoin as an asset class.
Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities.
Implications for Bitcoin and the Crypto Market
The approval of bitcoin ETFs by the SEC is a significant step towards mainstream adoption and recognition of cryptocurrencies. It paves the way for increased institutional participation and could potentially attract billions of dollars in investments. The ETFs offer investors an indirect way to invest in bitcoin, thereby reducing some of the risks associated with direct ownership. This development also highlights the growing acceptance of cryptocurrencies within traditional financial circles, signaling the potential for widespread growth as an alternative asset class.
Conclusion
The approval of bitcoin ETFs by the SEC, exactly 15 years after Hal Finney’s iconic tweet, is a significant milestone for the cryptocurrency industry. It signals a shift towards mainstream acceptance of bitcoin and opens up new avenues for investors to participate in the crypto market.
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While bitcoin’s original intent was to operate outside traditional financial systems, its integration into Wall Street highlights its potential as a legitimate alternative asset. As the crypto market continues to evolve, the approval of bitcoin ETFs could pave the way for the introduction of other innovative crypto products and further regulatory developments in the industry.
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