As of Wednesday, the Securities and Exchange Commission (SEC) has finally given crypto investors what it has been waiting for by approving 11 issuers that applied for the long-sought spot Bitcoin ETFs. Parties approved included businesses such as Grayscale, Ark Investment, BlackRock, VanEck, Wisdom Tree, Fidelity, Invesco Franklin, Hashdex and Valkyrie. Grayscale, the world's leading crypto asset manager, was approved for listing its Grayscale Bitcoin Trust (GBTC) on the New York Stock Exchange (NYSE), becoming what it is calling "the world's largest Bitcoin ETF" with over $28.5 billion in BTC under management.
Trading of the Bitcoin ETFs started on Thursday morning, bringing excitement to investors based on the idea that an ETF will bring in a Web2 investment crowd and significant involvement by institutional investors.
The crypto world seems to have pinned its hopes on Bitcoin (CRYPTO: BTC), the world's leading decentralized digital currency, anticipating that it will reach new heights in value, carrying altcoins with it on its rise to the top.
High hopes for spot BTC ETFs gave the leading coin a boost around the new year, surging 164% at the end of 2023 and starting the new year at its highest level in nearly two years with a valuation above $45,0000.
BTC prices dipped 10% last week based on speculation by Matrixport that the applications would not be approved.
The Regulatory Shuffle Has Stepped On Crypto's Toes
The question of ETFs is just another step in the uneasy dance between the SEC and the crypto industry, and 2023 was an eventful year full of regulation by way of litigation. The SEC reported in November that it had filed 784 enforcement actions, obtained orders for nearly $5 billion and distributed almost $1 billion to harmed investors.
Benzinga interviewed Jesper Toft, founder and CEO of Global Stability Unit (GSU) Protocol, concerning the SEC's sometimes unfriendly behavior toward crypto and the policies that will create global winners and losers in Web3 and beyond.
What does the SEC's approval of spot Bitcoin ETF applications mean for the crypto world?
The SEC's approval of the Bitcoin ETF is a massive victory for the crypto ecosystem.
What is your POV on SEC legal actions and delays in 2023?
In 2023, it looked like the SEC was panicking and suing everybody to the left and right.
The U.S. is really trying to protect the dominance of the U.S. dollar in the future. If you look at it from a business operation perspective, the U.S. dollar will meet really serious competition from the digital asset space. Solutions are emerging, including the GSU, which is academically and empirically documented to be a better alternative to the dollar as it has higher international price stability. The U.S. debt has exploded over the last 15 years. And the vast majority of the growth came within the previous five years. All this debt accumulated in an environment where you had zero interest rates. But now, you have an interest rate between 3.5% and 5%, depending on the length of the bill. So it's becoming a real issue.
Is the EU doing any better regarding a clear crypto regulatory structure with MiCA regulations?
I think you can say they recently took a twist in the road, but it's leading nowhere. MiCA is about protecting the banks' positions in the market. When MiCA takes effect, we will have consolidation among the few blockchain projects already in the market, and it will be extremely difficult to break in. If you want to open an exchange, it won't be easy. The issuance of tokens will be tightly controlled by the financial regulators. Regulators need to approve any white paper.
Does crypto provide a viable alternative to the world's leading fiat currency?
Like the advent of cell phones, people will make the switch to better technology when the alternative comes along. Until then, people are forced to stick to whatever they have. But as soon as there is an alternative available, that change occurs. A lot of effort is being made to prevent the alternatives from coming in and becoming obvious because as soon as they break through, they will become adopted.
Crypto has yet to show price stability, so how can any token claim to be more stable than USD?
GSU is based on real economic numbers. We look at the capital flow between the 32 largest countries in the world economically and 35 of their trading partners. We created a system that turns those fluctuations into an exchange rate, from which we created a system that enabled the issuance of GSU coins – a representation of measured volatility. We measure how much currencies fluctuate, which we turn into an exchange rate. It's a function that doesn't exist in the old fiat world.
The crypto world is counting on Bitcoin ETFs and the advancement of Bitcoin with factors such as the upcoming halving in April to lead the way out of this extended bear market we've all been experiencing. Toft may be correct in a greater sense that the SEC is fighting what it regards as a battle against the existential threat of crypto.
It seems distant, but a global, distributed currency such as Bitcoin could become more useful than the world's largest fiat currency, USD. If that's the course events are heading, then the approval of Bitcoin ETFs is one more step toward Bitcoin fulfilling its promise and its mission as a leading global distributed electronic currency.
Cover image by Tamim Tarin from Pixabay.
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