Special News - Spot Bitcoin ETF Is Approved By the SEC

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 Hello McFinancers! We wanted to send an important announcement today outside of weekly market emails. The spot Bitcoin ETF was approved by the SEC yesterday.

Bitcoin ETF Approved

After all the crazy drama these past few months (hacked X/Twitter accounts posting fake approval news or the numerous cases involving the SEC and some crypto firms), it felt like it would never happen. The SEC has finally approved a spot ETF for Bitcoin! The SEC has approved ETFs for trading as early as Thursday (11 January 2023). The ETFs that were approved are:

  • Grayscale Bitcoin Trust - GBTC - 1.5% expense fees

  • Hashdex Bitcoin Futures ETF - DEFI - 0.94% expense fees

  • Valkyrie Bitcoin Fund - BRRR - 0% for three months then 0.49% expense fees

  • Wisdom Tree Bitcoin Trust - BTCW - 0% for six months then 0.3% expense fees

  • Franklin Bitcoin ETF - EZBC - 0.29% expense fees

  • iShares/Blackrock Bitcoin Trust - IBIT - 0.12% for 12 months then 0.25% expense fees

  • VanEck Bitcoin Trust - HODL - 0.25% expense fees

  • Fidelity Wise Origin Bitcoin Trust - FBTC - 0% for six months then 0.25% expense fees

  • ARK Invest/21 Shares - ARKB - 0% for six months then 0.21% expense fees

  • Bitwise - BITB - 0% for six months then 0.2% expense fees

  • Invesco Galaxy Bitcoin ETF - BTCO - 0% for six months then 0.39% expense fees

With this approval, we feel that this will allow more capital from institutions to buy and trade Bitcoin than individual investors. This will cause an inflow of new capital in Bitcoin and other cryptos thus raising the price of Bitcoin. These ETFs will allow institutions to buy and sell Bitcoin as they please without affecting the market price of Bitcoin. While the ETF can be traded hundreds or thousands of times a day, it won’t have a major impact on the price of Bitcoin because the actual Bitcoins, held by the issuers, won’t be trading. The price increase in Bitcoin will come from the demand for Bitcoin. It is simple economics, as supply stays neutral (or decreases in April 2024) and demand increases you will have a price increase. As more institutions and investors buy more shares of the Bitcoin ETFs, this will make the issuers of the ETF buy more Bitcoin thus causing the price to increase.

While the ETF approval is wonderful news, we still recommend that any individual interested in holding Bitcoin still hold their Bitcoin in a cold wallet, if they can. We believe that the benefits of owning it yourself are better than just holding an ETF. By owning it, you can take it anywhere with you in the world and not be restricted to using it only in US brokerages. It also allows you to have access to your Bitcoin whenever you want since Bitcoin trades 24/7 whereas the stock market only trades certain hours of the week. The last major benefit to owning your Bitcoins is that you have control over your keys. There is a saying in crypto “Not your keys, not your crypto“. This is saying that you can never truly trust centralized organizations to protect your crypto. Whether this is from hackers attacking these organizations or illegal use of funds (i.e. FTX), there is a possibility that you can lose it all. But let’s not focus all on the negatives but on the future of Bitcoin.

* Investing can be unpredictable and volatile. Investors should always do proper due diligence to determine if assets are right for them. We are not licensed tax or financial professionals.

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