Major milestone for bitcoin: First spot bitcoin ETF approved in the US

Remo Zuiderwijk Content specialist

10 January 2024

After dominating the headlines for months, it's now official. The U.S. financial markets regulator has given its approval for several spot bitcoin ETFs. This long-awaited decision marks a significant milestone in the recognition and adoption of crypto assets. 

But what exactly is a spot bitcoin ETF, and why is this big news? Let's break it down for you.

What is a spot bitcoin ETF?

The term ETF stands for Exchange-Traded Fund. The purpose of an ETF is to track the price movement of one or more tradable assets on the stock exchange. With a spot bitcoin ETF, investors can gain exposure to the price fluctuations of bitcoin through a traditional broker without having to buy and store bitcoin themselves.

And what about the term "spot"? It means that these ETFs are based on 'real' bitcoin and not derivative products like futures. Bitcoin futures ETFs have been around for a while but are relatively expensive and don't closely track the bitcoin price. Spot bitcoin ETFs do just that.

Why the approval of spot bitcoin ETFs is big news

The approval by the US regulator shows that the authorities are taking bitcoin seriously. It signifies the maturity of the crypto market and recognizes crypto assets as a standalone asset class.

Furthermore, spot bitcoin ETFs make it much more accessible for investors to invest in bitcoin  and attract a diverse audience. Traditional brokers can now offer direct exposure to bitcoin, and the ETF itself can also become part of other funds.

U.S. institutional investors who couldn't hold bitcoin can now invest in bitcoin through a spot ETF. Some investors have been waiting for a financial product like an ETF as a stamp of approval and maturation.

An ETF doesn't just appear out of thin air. The registration process is extensive and involves meeting strict requirements. The completion of this process is significant news for bitcoin and crypto assets.

What does the approval of spot bitcoin ETFs mean for the market?

Apart from legitimizing bitcoin as an asset, the approval generates significant attention. Several major fund managers have already released their first campaign videos with bitcoin at the center. The arrival of the spot ETF not only makes bitcoin more accessible to the global public but also reintroduces bitcoin in a way it has not been seen before.

The marketing campaigns are not the only focus for fund managers. Reportedly, the world's largest asset manager, BlackRock, has $2 billion ready to launch its fund. 

The total expected capital inflow into bitcoin is much greater. Fund manager VanEck predicts an inflow of $40 billion in the first two years, while Standard Chartered Bank goes even further, forecasting an inflow of $50 to $100 billion in 2024.

But it doesn't stop at bitcoin alone. The approval of the spot bitcoin ETF makes the approval of similar products much more likely. Multiple applications for a spot Ether ETF have already been submitted to the U.S. regulator, and they may follow bitcoin's lead later this year.

What does the arrival of the spot bitcoin ETF mean for Dutch investors?

As a Dutch investor, you cannot invest in bitcoin through a U.S. spot ETF. American providers do not comply with European regulations due to the absence of the correct (Dutch-language) documentation.

If you want to invest in bitcoin through a regulated Dutch entity, with the assurance that your bitcoin will be securely stored, then Amdax is the right choice for you.

Do you already own bitcoin? You may benefit from a potential price increase due to the influx of new capital. If you want to own more bitcoin, Amdax makes that possible with our self-developed algorithmic strategy: Bitcoin Algo.

Whether you own crypto or intend to invest, always be aware that investing in crypto assets comes with risks.

Starting to invest in crypto

Amdax is ready to guide you in the new world of digital assets. Open an account or contact our account team.

The information provided in this article is for informational purposes only and does not constitute (individual) investment advice, financial advice, trading advice or any other type of advice.

Remo Zuiderwijk Content specialist

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