US bitcoin ETFs begin trading, in test of investor appetite for crypto

investing.com:

By Manya Saini, Niket Nishant and Hannah Lang

(Reuters) — Several exchange-traded funds (ETFs) tied to the spot price of bitcoin began trading in the U.S. on Thursday in a landmark moment for the cryptocurrency industry that is set to test the broader acceptance of digital assets as an investment.

The green light from the U.S. Securities and Exchange Commission finally came late on Wednesday, following a decade-long tussle with the crypto industry.

Eleven spot bitcoin ETFs, including BlackRock (NYSE:BLK)'s iShares Bitcoin Trust, Grayscale Bitcoin Trust, Valkyrie Bitcoin Fund and ARK 21Shares Bitcoin ETF, among others, began trading Thursday morning, kicking off a fierce competition for market share.

«The approval has the potential to simplify and secure bitcoin investments for a broader investor base, which may reshape the dynamics of cryptocurrency investments,» said Rajeev Bamra, senior vice-president of digital finance at Moody's (NYSE:MCO) Investors Service.

The ETF launches lifted the price of bitcoin up to its highest level since Dec. 2021. It was last up 0.16% at $46,021, while the price of ether, the second-largest cryptocurrency, was up 2.42%.

RACE FOR MARKET SHARE

The regulatory nod is expected to start an intense competition for market share among the issuers, some of whom lowered the fees for their products well below the U.S. ETF industry's standard even before Thursday's launch.

Fees on the new bitcoin ETFs range from 0.2% to 1.5%, with many firms offering to waive fees entirely for a certain period of time. For short-term speculators looking to buy in and out of the products, liquidity could be a more important factor.

Grayscale — which was approved to convert its existing bitcoin trust into an ETF