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3 Stocks to Watch as SEC Finally Approves Bitcoin ETF Applications
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On Wednesday, in what can be dubbed a watershed moment for the crypto market, the U.S. Securities and Exchange Commission (“SEC”) finally green-lit the launch of 11 spot Bitcoin ETFs. This now allows retail investors to trade the world’s largest cryptocurrency without having to own it.
In the previous session, an official social media account of the SEC announced that the regulatory body had already approved the applications, leading to Bitcoin (BTC) soaring above the $48,000 mark on Jan 9. However, soon afterward, SEC officials clarified that the account had been hacked and the ETF applications had not been approved yet, sending Bitcoin crashing down to the $45,500 level. The Wednesday announcement put an end to this chaos, and the benchmark cryptocurrency topped the $47,500 mark on the news.
These approvals from the SEC follow years of stalling and outright rejections of numerous attempts to launch spot Bitcoin ETFs. However, in 2023, the loss of a major lawsuit may have been the chief catalyst in the regulatory body finally giving the nod. In August, a court ruled that the SEC was "arbitrary and capricious" in its decision to reject Grayscale's attempt to convert its roughly $26 billion Grayscale Bitcoin Trust (GBTC) into a spot ETF. In fact, SEC Chair Gary Gensler even pointed out the significance of the court ruling behind the approvals.
"The U.S. Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP (the Grayscale Order). The court therefore vacated the Grayscale Order and remanded the matter to the Commission. Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares," he said.
This set of approvals from the regulators had been anticipated for several months, and a decision was being expected before the end of the week. Despite the volatility and risk attached to cryptocurrencies in general, this move to take them mainstream was much awaited as this will also ensure closer monitoring of the digital coin market, something the sector had always resisted.
Investor optimism is currently at a very high level, and one must track some of the major spot Bitcoin ETF applicants at this current juncture to understand the impact this news might have on them. These are some of the biggest names in the traditional marketplace that have decided to explore the crypto space in recent months, starting June 2023.
BlackRock, Inc. (BLK - Free Report) : This enterprise risk management and fixed-income institutional asset manager applied to launch a crypto exchange-traded fund in June. BlackRock is the world’s largest asset manager. BlackRock’s expected earnings growth rate for the current year is 4.4%. BLK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Invesco Ltd. (IVZ - Free Report) : This investment management company had first filed for a Bitcoin ETF in 2021 but dropped it in October of the same year. However, in June of 2023, it joined the race to be the first investment industry giant to launch a Bitcoin ETF. Invesco’s expected earnings growth rate for the current year is -15.5%. However, it is expected to grow 13% next year. IVZ currently carries a Zacks Rank #4 (Sell).
WisdomTree, Inc. (WT - Free Report) :This ETF sponsor and asset manager also joined the crypto ETF race by applying for one in June 2023. WisdomTree’s expected earnings growth rate for the current year is 42.3%. WT currently carries a Zacks Rank #4.
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3 Stocks to Watch as SEC Finally Approves Bitcoin ETF Applications
On Wednesday, in what can be dubbed a watershed moment for the crypto market, the U.S. Securities and Exchange Commission (“SEC”) finally green-lit the launch of 11 spot Bitcoin ETFs. This now allows retail investors to trade the world’s largest cryptocurrency without having to own it.
In the previous session, an official social media account of the SEC announced that the regulatory body had already approved the applications, leading to Bitcoin (BTC) soaring above the $48,000 mark on Jan 9. However, soon afterward, SEC officials clarified that the account had been hacked and the ETF applications had not been approved yet, sending Bitcoin crashing down to the $45,500 level. The Wednesday announcement put an end to this chaos, and the benchmark cryptocurrency topped the $47,500 mark on the news.
These approvals from the SEC follow years of stalling and outright rejections of numerous attempts to launch spot Bitcoin ETFs. However, in 2023, the loss of a major lawsuit may have been the chief catalyst in the regulatory body finally giving the nod. In August, a court ruled that the SEC was "arbitrary and capricious" in its decision to reject Grayscale's attempt to convert its roughly $26 billion Grayscale Bitcoin Trust (GBTC) into a spot ETF. In fact, SEC Chair Gary Gensler even pointed out the significance of the court ruling behind the approvals.
"The U.S. Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP (the Grayscale Order). The court therefore vacated the Grayscale Order and remanded the matter to the Commission. Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares," he said.
This set of approvals from the regulators had been anticipated for several months, and a decision was being expected before the end of the week. Despite the volatility and risk attached to cryptocurrencies in general, this move to take them mainstream was much awaited as this will also ensure closer monitoring of the digital coin market, something the sector had always resisted.
Investor optimism is currently at a very high level, and one must track some of the major spot Bitcoin ETF applicants at this current juncture to understand the impact this news might have on them. These are some of the biggest names in the traditional marketplace that have decided to explore the crypto space in recent months, starting June 2023.
BlackRock, Inc. (BLK - Free Report) : This enterprise risk management and fixed-income institutional asset manager applied to launch a crypto exchange-traded fund in June. BlackRock is the world’s largest asset manager. BlackRock’s expected earnings growth rate for the current year is 4.4%. BLK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Invesco Ltd. (IVZ - Free Report) : This investment management company had first filed for a Bitcoin ETF in 2021 but dropped it in October of the same year. However, in June of 2023, it joined the race to be the first investment industry giant to launch a Bitcoin ETF. Invesco’s expected earnings growth rate for the current year is -15.5%. However, it is expected to grow 13% next year. IVZ currently carries a Zacks Rank #4 (Sell).
WisdomTree, Inc. (WT - Free Report) :This ETF sponsor and asset manager also joined the crypto ETF race by applying for one in June 2023. WisdomTree’s expected earnings growth rate for the current year is 42.3%. WT currently carries a Zacks Rank #4.