This January was an eventful month for the crypto community. From the celebration of Bitcoin’s 15th birthday to the approval of the Bitcoin Spot ETFs and the open trade that followed shortly after it. So, let’s review everything one by one.
The Bitcoin Birthday
On the third day of this year, the internet was flooded with birthday cakes and candles, best wishes, and pictures of yellow coins with the letter B on them. Perhaps even you were a part of the Bitcoin’s Birthday celebration. Well, we are not sure how to tell you this, but a significant impact from a widespread influence was at work here.
To be more precise, January 3rd is not exactly the date of Bitcoin’s birth, January 9th is.
Many people celebrate on the 3rd because it truly is a memorable and historic date for Bitcoin, but not its birthday. This is the day its Genesis block (otherwise known as block 0) was programmed. Pay attention to the choice of words, programmed, not mined.
If you are familiar with how a blockchain works, you already know that there can be a lot of blocks created by various crypto enthusiasts. However, these blocks do not become part of the chain until it is verified by minting the next block on top of it.
Exactly this could have and most likely did happen with the Bitcoin blockchain. Bitcoin blockchain had many 0 blocks programmed but it became clear which one is the real one only after the 1st block was mined on top of it.
This event, the validation of the genesis block, and minting of the first block happened on January 9, 2009. And this is why we celebrate the birthday on this day because, before it, no one knew which block would become the start of the chain.
Bitcoin Spot ETF
Shortly after all the birthday celebrations the internet once again was filled with happy news related to BTC. On January 10th, the U.S. Securities and Exchange Commission approved the first Bitcoin Spot ETFs.
This was a long-awaited crypto community event dating back to 2016 when Grayscale Investments submitted a Bitcoin ETF application. Nonetheless, the hype of the ETFs started growing at the end of 2023, but even then, one thing was not anticipated. Plenty of crypto community members foresaw the approval but not many expected the trade to be opened this quickly.
Before the approval, some thought it would take a few weeks before the trade opened. In reality, it happened so quickly (one day later) that few news platforms published the news of open trade before the articles of approval.
Changes in the Market
With all the celebratory posts and hype surrounding the Bitcoin Spot ETF news, you don’t have to be an expert in finance or the crypto economy to understand that it is a positive step forward. Still, knowing what changes this approval brings to the community can be beneficial.
“This approval has a positive impact on Bitcoin, and hopefully more crypto-related instruments in the future, in terms of accessibility, capital inflows, and regulatory landscape. It opened the doors for BTC to be used even by the most conservative institutions. This means more capital inflows into the crypto market. And the fact that the U.S. is ready to take this step will shift the regulatory framework in other countries,” says Vytautas Kašėta, Co-Founder and CIO of SUPER HOW?
Since cryptocurrencies are usually bought through specifically tailored exchanges and require a digital wallet to be stored, up until now traditional investors could not acquire it comfortably and without much extra effort. Bitcoin Spot ETFs simplify the process for them making the crypto market accessible even for the most conservative institutional investors like mutual funds, pension funds, and insurance companies. For instance, Fidelity is allocating 1% of its most conservative ETF investments to Bitcoin Spot ETFs.
Since BTC is now available to the broader public this newly acquired accessibility is likely to correlate with the market size in terms of capital. Or to put it simply, more investors bring more liquidity, and this process has already begun. As of January 9, 2024, Bitcoin Spot ETFs are the most popular ETFs in Wall Street history. For example, Blackrock Bitcoin Spot ETFs now hold 78,026 BTC.
Finally, the Securities and Exchange Commission (SEC) giving the green light is seen as a landmark decision, signaling a level of regulatory acceptance. With proper regulation, the crypto market is opened to a whole new set of opportunities. It also leaves less space for skepticism as supervised markets become less attractive for illicit activity.