Wednesday was a banner day for cryptocurrencies, and that's saying something for an asset class that has bounced up and down on major events over the years. A series of regulatory approvals, while fully expected and anticipated by the market, boosted the prices of many coins and tokens that day.
Among the beneficiaries were altcoins Optimism (CRYPTO:OP) and Arbitrum (CRYPTO:ARB), which enjoyed 20%-plus gains (of a respective 21% and 24%, to be exact). Lido DAO (CRYPTO:LDO) and Maker (CRYPTO:MKR), to name another two, didn't rise as much but still booked double-digit gains of 15% and 13%, respectively.
The SEC finally approves spot crypto ETFs
So, the big, market-moving news the cryptoverse expected would happen early this year finally occurred. Meeting its Jan. 10 deadline to render a decision on at least one of the 11 firms applying to publicly offer spot Bitcoin exchange-traded funds, the Securities and Exchange Commission (SEC) turned on the green light for all of them.
For a moment, it seemed that such approval had been granted on Tuesday. A post on the SEC's X (formerly Twitter) account stated somewhat vaguely that the regulator gave the nod to spot Bitcoin ETFs. The agency later said its X feed had been hacked; a preliminary investigation showed that the hack was conducted by one individual it did not identify.
Regardless of the bumpy road such securities have traveled to approval, it's a boon to the industry that they're finally here. The firms behind them are clearly chomping at the bit to get started. According to filings submitted to options exchange CBOE, a clutch of them is slated to begin trading on Thursday.
As often happens in the crypto world, a positive major development in market leader Bitcoin was the high tide lifting nearly all boats. In this case, spot Bitcoin ETFs are surely a precursor to such securities featuring altcoins. Just now, the first ones will likely feature top altcoins alone, then baskets of different coins and tokens, and finally, specialty niche products featuring lesser-known assets in the class.
This should be quite the market mover
It's worth devoting a few words to why the arrival of spot crypto ETFs promises to be such a catalyst for the broader market.
These securities "wrap" digital currencies into an investible asset that can be quickly bought and sold on an exchange. This makes them relatively simple and painless to own, hold, and divest. As such, they are sure to attract the hesitant crypto-curious who -- with justification -- balk at the frequently complex procedures and requirements of direct coin/token ownership.
This is an exciting time for cryptocurrencies. It's hardly an exaggeration to say that the coming of spot crypto ETFs will change the way much of the public invests in such assets. And it's surely going to make them more popular.
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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and Lido DAO. The Motley Fool has a disclosure policy.
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