BTC ETF Application History

Overview

The Bitcoin (BTC) Exchange-Traded Funds (ETFs) applications have undergone multiple submissions and delays. Since 2013, various institutions and companies such as BlackRock, VanEck, WisdomTree, etc., have submitted applications for BTC ETFs. These applications include both “spot” ETFs that directly invest in digital currencies and ETFs that invest in Bitcoin through futures contracts. However, the U.S. Securities and Exchange Commission (SEC) has been cautious about these applications and has rejected them multiple times. The approval process for these applications has also been subject to strict scrutiny by regulatory agencies, including considerations regarding potential market manipulation and investor protection. However, with the increasing interest of institutional investors in the cryptocurrency market and the impact of significant legal rulings, the approval of BTC ETFs may become a reality.
For example, in October 2023, the court supported Grayscale’s lawsuit against the SEC, stating that the SEC’s decision to reject the conversion of Grayscale Bitcoin Trust (GBTC) into an ETF was “arbitrary and capricious,” opening the door for the SEC to approve BTC ETFs. Overall, the history of BTC ETF applications can be described as a prolonged period of review and delays, and the market is eagerly anticipating the approval of these applications as it could significantly impact the cryptocurrency market.

Review

Reviewing the BTC ETF application submission to the U.S. Securities and Exchange Commission (SEC), we can see this challenging and lengthy journey in the SEC’s revelations.
First, let’s review the history of BTC ETF applications in the United States:

• July 1, 2013: The Winklevoss brothers submitted the first BTC ETF application in the United States, which was rejected on March 10, 2017.
• July 12, 2016: SolidX submitted an application, and on June 6, 2018, VanEck joined the collaboration and launched the VanEck SolidX Bitcoin Trust, which was withdrawn on January 23, 2019.
• July 11, 2017: Grayscale submitted an application and announced its withdrawal on October 25, 2017.
• September 27, 2017: ProShares submitted an application and was rejected on August 22, 2018.
• December 15, 2017: Direxion and GraniteShares submitted applications and were both rejected on August 22, 2018.
• January 10, 2019: BitWise submitted an application and was rejected on October 9, 2019.
• January 11, 2019: Wilshire Phoenix submitted an application and was rejected on February 25, 2020.
• February 11, 2019: Reality Shores submitted an application and withdrew it two days later under the SEC’s suggestion.
• October 2019: Kryptoin submitted an application with the aim of listing the Kryptoin Bitcoin ETF Trust on the New York Stock Exchange Arca. The SEC began reviewing the revised application in April 2021.
• June 6, 2020: WisdomTree Trust submitted an application with only 5% BTC assets.
• December 30, 2020: VanEck resubmitted the VanEck Bitcoin Trust application, which was the first BTC ETF application received by the SEC after Jay Clayton’s departure.
• January 2021: Valkyrie Investments submitted an application, with Xapo as its custodian, storing BTC in cold storage.
• February 16, 2021: New York Digital Investment Group (NYDIG) and consulting firm Stone Ridge submitted an application to the SEC.
• March 2021: WisdomTree, a New York-based asset management company with experience in BTC ETF operations, submitted an S-1 application to the U.S. Securities and Exchange Commission to list the shares of its WisdomTree Bitcoin Trust on the Cboe bZx Exchange (trading code BTCW). The company already launched a BTC ETF on the Swiss Stock Exchange SIX in 2019.
• March 2021: Fidelity’s Wise Origin Bitcoin Trust submitted an application. Prior to this, Jurrien Timmer, Director of Global Macro at Fidelity, stated that BTC has unique advantages over gold. According to the application file of Wise Origin Bitcoin Trust, Fidelity Service Company Inc will act as the fund manager, and Fidelity Digital Assets will serve as the custodian.
• April 2021: Kryptoin made a second attempt to submit an application, planning to list on Cboe’s BZX Exchange. The revised application file also disclosed information about its ETF service provider, including the cryptocurrency exchange Gemini, which will provide custody services for BTC assets.
• April 2021: Galaxy Digital, a cryptocurrency investment company, submitted an application to list the Galaxy Bitcoin ETF on the New York Stock Exchange Arca.
• May 2021: One River Asset Management submitted an application for a carbon-neutral Bitcoin exchange-traded fund.
• May 2021: Cboe Global Markets submitted a proposal to list Fidelity’s BTC ETF. CBOE believes that SEC’s concerns about market manipulation have been sufficiently alleviated with increased investor participation and institutional adoption of cryptocurrencies. In the same month, the U.S. Securities and Exchange Commission began reviewing Fidelity’s application.
• June 2021: Ark Invest submitted an application for the Ark21Shares ETF to the SEC. Previously, ARK Invest collaborated with 21Shares AG to launch the ARK 21Shares Bitcoin ETF. If approved, the fund will trade on Cboe’s BZX Exchange with the ticker symbol ARKB. Additionally, Ark Invest was the first company to disclose ETF fees. According to the application file, 21Shares plans to charge a fee of 0.95%, which will be used to cover operational expenses. Ark Invest is also a major investor in cryptocurrency exchange Coinbase, Grayscale Bitcoin Trust, and payment processor Square, holding over 8,000 BTC on its balance sheet.
• July 2021: Global X Digital Assets submitted an application to list the Global X Bitcoin Trust on Cboe’s BZX Exchange.
• September 22, 2021: Galaxy Digital and Invesco Capital Management LLC jointly submitted an application to issue the Invesco Galaxy Bitcoin ETF. This ETF is directly backed by Bitcoin and has no association with futures or other derivatives.
• June 2023: BlackRock submitted an application for iShares Bitcoin Trust, leading a new round of BTC spot ETF applications, causing the price of Bitcoin to rise 20% within a week, from $25,000 to $30,000.
• August 31, 2023: The news of Grayscale’s victory caused the recent sluggish Bitcoin price to rise 5% within 24 hours, from $26,000 back to a high of $28,000. The market’s confidence in the approval of BTC spot ETFs was reignited.

Lessons from the History of BTC ETF Applications

Impact on the Cryptocurrency Market

The impact of BTC ETF applications on the cryptocurrency market has always been a topic of great interest. From news and hot topics, it can be inferred that the potential approval of BTC ETF may have the following effects on the cryptocurrency market:

Market Acceptance

The approval of BTC ETF may enhance the market acceptance of cryptocurrencies. This means that more institutional and individual investors may allocate funds to the cryptocurrency market, thereby driving up the prices of cryptocurrency assets.

Liquidity

The approval of BTC ETF may also bring more liquidity. ETF products have higher liquidity, which means that more funds can enter the cryptocurrency market in different ways. In a market with more abundant liquidity, the prices of underlying assets may be more stable.

Market Regulation

The approval of BTC ETF may also bring more regulatory supervision to the cryptocurrency market. This may attract more institutional investors while providing more transparency and stability for market participants.

Investment Channels

The approval of BTC ETF may also bring more investment channels to the cryptocurrency market. This means that more investors can invest in Bitcoin through traditional securities exchanges without directly holding cryptocurrencies themselves.

In summary, the approval of BTC ETF may have multiple positive impacts on the cryptocurrency market, including increased market acceptance, improved liquidity, enhanced regulatory supervision, and more investment channels.

How to Intelligently Profit from BTC’s Volatility

Cryptocurrency Market Cap Trends During BTC ETF Application Period

The market cap of the cryptocurrency market has increased from $1.17T on July 1, 2013, when the first BTC ETF application was submitted, to $1.42T on November 15, 2023, representing an overall increase of $0.25T. During this period, the market cap reached a historical high of $2.84T and then experienced downward fluctuations.

The volatility of Bitcoin (BTC) refers to its rapid and unpredictable price fluctuations during a specific period of time. Unlike traditional financial markets, the price volatility in the cryptocurrency market is often influenced by various factors. Some of these factors include market demand, scarcity of supply, investor sentiment, regulatory developments, technological advancements, and global economic conditions. The price volatility of Bitcoin is also affected by speculation, lack of regulation, news and social sentiment, liquidity, and technical factors. For example, a news report or a comment on social media can significantly impact the price of Bitcoin. Additionally, due to the relatively small market capitalization of most cryptocurrencies, large trades can have a disproportionate effect on the price. The price volatility of Bitcoin requires investors to conduct thorough research, exercise caution, and make wise decisions based on their own risk tolerance.

The rise of the gold ETF in 2004 has created a bull market for international gold prices, which has since increased nearly fivefold. Therefore, if the BTC ETF, as a digital gold, passes SEC scrutiny, it will also be seen as significant positive news in the cryptocurrency market. However, looking at the history of BTC ETF applications, its price fluctuations are quite volatile, and large risks are involved in single purchases. As a result, the Dollar Cost Averaging (DCA) investment strategy has emerged to participate in the ETF dividend trend steadily and reduce investors’ psychological pressure. In a volatile market with unclear trends, many investors are afraid of missing out on market gains and afraid of buying at high prices.
In this case, it is necessary to introduce a method that can avoid judging the buying and selling timing in the financial market and continuously enjoy the industry’s development and asset value appreciation dividends, which is the Dollar Cost Averaging (DCA) strategy. In the financial market, it is as difficult as finding a needle in a haystack to buy low and sell high. Without a good trading or investment strategy, it is easy to suffer losses in volatile market conditions. Dollar Cost Averaging (DCA) is an investment strategy that combats the drastic price fluctuations of underlying assets by purchasing a specified asset or portfolio in fixed time intervals with the same amount. By entering the market in batches to counter price fluctuations, the quantity purchased decreases when prices rise and increases when prices fall, achieving the effect of reducing the average cost.

Auto-Invest

Auto-Invest is a financial service that helps you regularly and systematically purchase cryptocurrency (HODL). Setting up a predefined investment strategy (investment period and amount) strictly adheres to discipline and helps you overcome human weaknesses. An auto-invest strategy is called Dollar-cost averaging, also known as DCA, involves purchasing a specified asset/portfolio with a predetermined amount at fixed intervals (you can choose hourly, daily, or monthly intervals based on your needs). It is a common investment strategy that is suitable for anyone who wants to navigate bull and bear markets. Once you have determined the investment target, there is no need to accurately time the market. If you have a long-term positive outlook on the asset, any moment is a good time to buy. Additionally, this strategy is user-friendly for investors with different capital sizes. You can set a target investment amount for each purchase, which makes it affordable and easy to stick to. This is a simple practice that helps you cultivate good discipline and a habit of saving. In the financial market, assets typically appreciate over time. By purchasing and holding blue-chip assets for the long term, you can potentially achieve significant returns.

Summary

Recently, the applications for BTC ETFs have attracted attention in the market, as institutional investors’ interest in cryptocurrencies continues to grow, leading to more BTC ETF applications. In particular, BlackRock’s application on June 15, 2023, has sparked optimism among market participants regarding institutional investors’ involvement in the cryptocurrency market. BlackRock’s application has generated discussion on the market because, as the world’s largest asset management company, its application could potentially alter the approval trend for BTC ETFs. Additionally, some industry observers believe that the SEC may approve several BTC ETF applications in the coming months, which could result in more mainstream capital flowing into the cryptocurrency space.
However, BTC ETFs will continue to undergo relentless scrutiny, review, and postponements. Therefore, to not miss out on every market peak while avoiding losses from downturns, starting an auto-invest plan such as DCA is a prudent and winning strategy. The best time to start DCA was ten years ago, followed by perhaps now.