Spot bitcoin ETFs were finally approved in the U.S. after a decade of trying. The Securities and Exchange Commission gave the green light Wednesday to key filings from the markets seeking to list the groundbreaking products. They will begin trading today. Bitcoin's price topped $47,500 following the decision and is now trading around $47,000. About a dozen companies, including BlackRock, Fidelity and Grayscale, sought to create bitcoin ETFs. These are spot ETFs, meaning they hold bitcoin itself, versus the already-approved bitcoin futures ETFs, which hold derivatives contracts tied to BTC. The hotly anticipated products will debut on U.S. markets run by the NYSE, Cboe Global Markets and Nasdaq, aided by major trading firms who plan to provide liquidity.

CEO Michael Sonnenshein's Grayscale Investments (Shutterstock/CoinDesk)

Grayscale, the manager of GBTC, claimed bragging rights as the first of the newly approved spot bitcoin ETFs to begin trading, a representative for the firm said on Thursday. “I am happy to confirm that GBTC started pre-trading at 4 am EST this morning,” Grayscale’s head of communications, Jennifer Rosenthal, said in an email. The conversion of Grayscale’s $27 billion bitcoin trust into an ETF was approved by the SEC on Wednesday, one of many applicants approved by the U.S. markets regulator.

The spot bitcoin ETF approvals also buoyed ether (ETH) traders, who are betting the token that powers the Ethereum network could be next in line. The ETH price has jumped 10% in 24 hours, while bitcoin added 1.3%. Tokens of layer 2 networks, which operate as individual blockchains but are ultimately built atop Ethereum, surged as well. Arbitrum’s ARB and Mantle’s MNT both gained more than 20%. Other Ethereum ecosystem tokens, ranging from meme coins to those that power Ethereum-based applications, rose 14% on average, the category tracked by CoinGecko shows. “The largest smart money inflows” were directed toward the Ethereum ecosystem in the past 24 hours, Nansen analyst Martin Lee said in a Telegram message. Nansen defines smart money as wallets that trade or invest in a way that is considered experienced or well informed and are usually profitable.

Bitcoin ETFs, which won regulatory approval in the U.S. on Wednesday, have been hugely hyped by dreamers exhilarated by the prospect they will open up cryptocurrency investing to the masses.

But there's always the danger that the newest new thing in finance will turn into a dud. Take meme stocks like GameStop, AMC and Hertz, which won a feverish following during the pandemic that shot their prices to the moon. Sometimes, however, they do get traction. Two decades ago, the debut of exchange-traded funds that let investors easily invest in gold prompted wildly optimistic predictions.

"This one is going to go gangbusters," Jim Wiandt, a well-known figure in the ETF space, told MarketWatch in November 2004 when speaking about gold ETFs. "It opens up a new asset class to investors."

- Omkar Godbole