The approval of the Bitcoin spot ETF and the hailing of investors are comparable to the success of the Olympic bid, how will it finally change the fate of Bitcoin?
Finance Associated Press, January 11 (Reporter Cheng Mengqi) The focus of the global financial market is once again focused on virtual assets, and after a protracted tug-of-war and hacking incident, the U.S. Securities and Exchange Commission finally approved the listing of 11 bitcoin spot ETFs.
According to the live video, at the moment when the Bitcoin spot ETF was listed, hundreds of people raised their arms and shouted, cheering like a soup, and investors cheered as if they had successfully bid for the Olympics. Numerous applications have been submitted before, but they have all been rejected, and now the success has really fueled the market.
Industry insiders believe that Bitcoin and Ether will rise significantly in 2023, and the approval of US spot ETFs may further fuel bullish sentiment and accelerate the integration of the traditional financial world and the virtual asset market, which is a milestone in the development of virtual assets. Not only will it make Bitcoin accessible to more traditional investors, but it may also bring greater liquidity to Bitcoin, which could have a profound impact on the entire financial market.
11 Bitcoin spot ETFs were approved, and the SEC chairman warned of risks
It is reported that spot bitcoin ETFs that have been approved through the expedited mode will be listed on Thursday local time, and the approved spot bitcoin ETF issuers include: Ark 21 Shares, Bitwise, BlackRock (BlackRock), Fidelity (Fidelity), Franklin Templeton, Grayscale (grayscale), Hashdex, Invesco (Invesco), WisdomTree, Valkyrie and VanEck.
In terms of fees, Bitwise and ARK have fees as low as 0 for the first 6 months or the first $1 billion, Fidelity has a fee of 0 for the first 7 months, BlackRock has a fee of 0.12% for the first 12 months or the first $5 billion, and Grayscale currently has the highest fee of 1.5%.
Affected by the listing of bitcoin spot ETFs, bitcoin soared by $2,000 to $47,000, and virtual currency-related stocks in Hong Kong stocks rose together, as of press time, BC Technology Group rose 9.75%, New Huo Technology rose 24.51%, Meitu rose nearly 5%, and Xiongan Technology rose nearly 30%.
The price of virtual assets seems to be on a roller coaster, you must know that just 2 days ago, due to the SEC's ambiguity and hackers, the price of Bitcoin once plunged. On January 9, local time, the SEC announced on its official social media account X that it had approved the listing of spot bitcoin ETFs. Subsequently, the chairman of the SEC issued an urgent document clarifying that the SEC's account was compromised and unauthorized content was published. The SFC has not approved the listing and trading of any spot Bitcoin ETF.
After the approval of the Bitcoin spot ETF, SEC Chairman Gensler posted an online article on the SEC's website, mentioning that the reason for the approval was largely due to the decision of the Federal Court of Appeals for the District of Columbia, and the committee failed to fully explain its decision not to approve the Grayscale ETF.
Notably, Gensler specifically mentions that "the SFC is neutral, and the underlying assets of the precious metal ETP have both consumer and industrial uses, in contrast to Bitcoin, which is primarily a speculative, highly volatile asset that is also used for illegal activities, including ransomware, money laundering, sanctions evasion, and terrorist organization financing." While the listing and trading of certain spot Bitcoin ETP shares was approved, the SFC did not approve or endorse Bitcoin. Investors should be cautious about the myriad risks associated with Bitcoin and cryptocurrency-related products. ”
Virtual assets have become an asset class that cannot be ignored
Indeed, the surge in virtual currencies in 2023 cannot change the fact that such assets have fluctuated significantly several times in the past 10 years. Countless investors in Bitcoin and Ether have experienced extreme stories of getting rich overnight and falling back into poverty overnight. Virtual assets are becoming a new asset class that cannot be ignored amid the worldwide attention and controversy.
The global crypto asset market capitalization reached $3 trillion in 2021 and will exceed $1 trillion at the beginning of 2023. Among them, Bitcoin and Ether are the two largest virtual assets, accounting for 39% and 17% of the total market value of virtual assets, respectively.
However, compared with the market value of $11 trillion for gold and $24 trillion for stocks, the future development of new asset classes such as virtual assets still has a very broad imagination.
Hong Kong may have another possibility of virtual assets
As a promising asset class, the world's attention has been drawn to Hong Kong after the approval of Bitcoin spot ETF in the United States.
Industry insiders pointed out that Hong Kong regulators' supervision of virtual assets is at the forefront of the global industry, and each statement is not an empty dogma, but a pioneering exploration based on practical actions. The SFC is ready to evaluate and process applications for authorization of funds such as virtual asset spot ETFs, and has made substantial progress in this direction, such as its regulatory measures for cash asset ETFs are clearer than those of the US Securities and Exchange Commission, ensuring fair and equitable transactions.
Source: Hong Kong Securities and Futures Commission
In December last year, when the SFC updated its Joint Circular on Virtual Asset-related Activities of Intermediaries, it made clear that it was open to spot virtual asset ETFs, allowing investors who are interested in virtual assets to see another possible new world. Regarding the SFC's statement that it is ready to accept virtual asset spot ETFs, the head of securities product development of HKEX Lo Boren said that the SFC's statement makes Hong Kong the first market in Asia to allow the listing of virtual asset spot ETFs, strengthens Hong Kong's position as a leading digital asset hub in the region, and will work closely with issuers and parties to prepare for the smooth introduction of new products in Hong Kong's ETF market.
In addition, HashKey Group's Chief Operating Officer, Weng Xiaoqi, revealed that there are currently about 10 fund companies preparing to launch virtual asset spot ETFs in Hong Kong, and seven or eight of them are already in the actual stage of advancement.
After the SEC passed the issuance of spot bitcoin ETF in the early hours of this morning, Hong Kong Legislative Council member Wu Jiezhuang posted on social media that Hong Kong should also dare to be a "leader" in the field of virtual assets, and promote the development of the entire industry through innovative policies. In the highly competitive environment, it will be able to seize a place in the world by being the first to apply for the implementation of relevant policies and products in Asia, consolidating Hong Kong's opportunities as a global hub for virtual assets. In addition, education on virtual assets should also be strengthened to reduce the opportunities for criminals to use virtual assets to commit fraud.
As early as December 16, 2022, the Hong Kong Stock Exchange listed two virtual currency ETF futures, namely CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF, which track standardized, cash-settled Bitcoin futures contracts and Ether futures contracts traded on the Chicago Mercantile Exchange, respectively, which have gained 158.7% and 97.2% respectively in 2023.
Comparison of bitcoin products, source: CSOP
Regarding the impact of the SEC's approval of spot ETFs, Wang Yi, director of the quantitative investment department of CSOP, said: "Traditional financial institutions will be able to buy bitcoin through spot ETFs, thereby further increasing the market demand for bitcoin. Due to the limited total supply of Bitcoin, increased demand has the potential to push up the price of Bitcoin. Although Hong Kong allowed the issuance of spot ETFs before the United States, the actual product launch time will be slightly behind the US market. ”
Through the continuous attention and appeal of the regulator and the industry, perhaps the major event of virtual currency spot ETF issuance in Hong Kong is already on the agenda in the near future.
(Finance Associated Press reporter Cheng Mengqi)