By a representative of Fineqia International
One day after the dissemination of the false news claiming that the Security Exchange Commission (SEC) had granted approval to Bitcoin (BTC) ETFs Spot, the regulator officially confirmed the approval of 11 submitted ETFs. These ETFs are expected to commence trading today when US markets open at 2.30pm GMT.
The volatility in the aftermath of the announcement was nearly non-existent, likely influenced by the previous false news that was momentarily believed to be true. This false information, released just 24 hours prior, initially spurred a price increase, followed by a sell-off that brought the price below $45,000 before rebounding and stabilizing around $46,000.
The news was revealed with BTC trading at approximately $45,000, showing minimal initial volatility. However, the market response was positive, with BTC surging above $47,000 hours after the official announcement and various altcoins experiencing a robust uptrend. Rumours suggest that the 11 approved ETFs could launch with a cumulative Assets Under Management (AUM) of around $4 billion, indicating a substantial initial influx.
It’s crucial to note that the approval also encompasses the conversion of Grayscale Bitcoin Trust (GBTC) into an ETF, which might result in an outflow from the product. GBTC currently holds over 600,000 BTC, and many customers were unable to redeem their shares in previous years due to the product’s structure. This conversion provides an opportunity for these customers to redeem their shares, especially considering the comparatively high fee announced by Grayscale compared to its competitors.
Grayscale has announced a 1.5% management fee, while most competitors will have a management fee ranging between 0.2% and 0.3%. This discrepancy could lead to an initial outflow from Grayscale’s product in favour of competitors. However, the impact of this movement may be mitigated by the fact that redeeming shares from Grayscale would trigger a taxable event, potentially dissuading customers from making such a move.