SEC Grants Official Approval to First Regulated Spot Bitcoin ETFs; Elon Musk Explores the Idea of Using Bitcoin on Mars Despite Initial Hesitation; X (Twitter) removes NFT profile pictures
SEC Approved First Spot BTC ETFs
The U.S. Securities and Exchange Commission (SEC) has officially granted approval for the United States’ inaugural regulated spot Bitcoin exchange-traded funds (ETFs), marking a historic milestone in the cryptocurrency market. The approval, which follows a false announcement on the SEC’s official Twitter account the previous day, signals a significant shift in the regulatory landscape.
The 19b-4 applications from prominent firms including ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton have been approved. This green light means that rule changes allowing a spot Bitcoin ETF to be listed and traded on the respective exchanges have been given the regulatory nod. Investors can now access direct exposure to Bitcoin’s price through shares in ETFs that hold Bitcoin as their underlying asset, eliminating the need for investors to handle the cryptocurrency directly or manage self-custody.
The approval follows over a decade of denials from the SEC, which had consistently rejected proposals for spot Bitcoin ETFs due to concerns about potential market manipulation and fraud. Grayscale’s successful court case in August 2023, overturning the SEC’s denial of its application to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF, prompted the regulatory reevaluation.
While it remains uncertain whether the initial ‘Error 404’ message on the SEC website, showcasing the approval of 11 spot Bitcoin ETF filings, resulted from the commission pulling the document or overwhelming site traffic, industry experts anticipate the ETFs to begin trading soon.
The approval has drawn attention to the fees associated with these ETFs, with BlackRock, the world’s largest asset manager, opting for a 0.2% fee until the fund reaches $5 billion in assets under management (AUM). Other issuers, including Bitwise, Ark 21Shares, and VanEck, have outlined fee structures ranging from 0.24% to 0.25%, with Ark 21Shares waiving all fees for the first six months or until reaching $1 billion AUM. Notably, Grayscale’s prospective Bitcoin ETF carries the highest fee at 1.5%.
The industry is now poised to closely monitor the impact of these ETFs on the market, with projections suggesting substantial inflows, potentially reaching $14 billion in the first year for spot Bitcoin ETFs. Global fund manager VanEck estimates around $2.4 billion flows into spot Bitcoin products in the first quarter of 2024.
Elon Musk Explores the Idea of Using Bitcoin on Mars Despite Initial Hesitation
Tesla CEO and SpaceX founder Elon Musk, known for his ambitious goal of building a human colony on Mars, has reconsidered the use of Bitcoin as a potential currency for interplanetary transactions. During an X Spaces discussion with ARK Invest CEO Cathie Wood titled ‘ARK 21Shares Bitcoin ETF (ARKB) Approved,’ Musk initially dismissed Bitcoin due to its longer transaction settlement times.
While expressing concerns about Bitcoin’s reconciliation time, Musk later pondered the feasibility of using Bitcoin on Mars during a brainstorming session. He highlighted the challenge posed by the significant time delay between Earth and Mars, suggesting that a localized network might be necessary for efficient cryptocurrency use on the red planet.
“Mars can be like twenty light minutes away. So, it is not easy, there would have to be a localized thing on Mars,”
In response to the potential hindrance of Bitcoin’s slow transaction speed, Musk acknowledged Bitcoin core developer Matt Corallo’s suggestion that a localized Lightning Network could address the issue. The Lightning Network is a layer-2 scaling solution for Bitcoin designed to facilitate faster and more cost-effective transactions.
Despite the technical challenges, some experts, including Blockstream CEO Adam Back, expressed optimism about the idea. Back stated that the 12-22 light-minute communication delay between Earth and Mars would not be a problem with Bitcoin’s current 10-minute block time.
Elon Musk’s consideration of using Bitcoin on Mars aligns with his broader vision of establishing a human settlement on the planet by 2050. While practical challenges remain, Musk’s openness to cryptocurrency solutions in interplanetary scenarios adds an intriguing dimension to the ongoing discussions about the future of space exploration and financial systems beyond Earth.
It’s worth noting that Musk has previously shown interest in cryptocurrency-related initiatives, and there has been speculation about the possibility of integrating cryptocurrencies into his platform X, which he envisions as an “everything app.” However, Musk clarified in August 2023 that he had no plans to launch a cryptocurrency token on X.
X (Twitter) removes NFT profile pictures
Social media giant X, formerly known as Twitter, has removed support for nonfungible tokens (NFTs) from its premium subscription page.
As late as Jan. 1, X still featured profile picture support for NFTs. “As a Premium subscriber, you can create and customize your profile so you can show off the NFTs you own in a hex-shaped profile picture on your account,” the support page said. After a temporary connection to your crypto wallet that allows you to set up an NFT as your profile picture, your digital asset displays in a special hexagon shape that identifies you as the owner of that NFT.
By the time of publication, however, NFTs had been removed from X’s premium support page.
On Jan. 20, 2022, Twitter officially launched NFT profile pictures with a verification mechanism. Paid subscribers who used NFTs as their user profile received a special hexagonal border on their avatar.
In a similar move on March 15, 2023, Meta removed its support for NFT profile pictures on Facebook and Instagram, just 10 months after the integration was announced. While no specific explanation was given for the cessation, Stephane Kasriel, head of commerce and financial technologies at Meta, said that it was ending NFT support “to focus on other ways to support creators, people, and businesses.”
Shortly after the crypto bear market began, NFT trading volume had already plunged over 98% by September 2022. At the time, an NFT only fetched about $285 per sale on average, compared to around $2,000 in early January 2022.
