First US Spot Bitcoin ETFs Approved and Launched: Data Available via Rimes
January 11, 2024
The US market is experiencing a remarkable evolution with the launch of its first spot Bitcoin ETFs, introducing a new and evolving asset type to the region within the ETF wrapper. Yesterday afternoon, the US Securities and Exchange Commission (SEC) has approved the listing and trading of several spot Bitcoin ETFs on major exchanges like NYSE Arca, Nasdaq, and Cboe BZX Exchange. These launches were accelerated to go-live within hours of SEC approval, with Spot Bitcoin ETF data already validated. And, as Rimes sources high volumes of global ETF data directly from the providers, it is immediately available to our clients.
This regulatory approval is a significant step in advancing the trading of Bitcoin ETFs within the US financial markets. This follows the October 2021 launch of the first US Bitcoin Futures ETF (BITO) which became in just two days the fastest ETF to reach $1bn in AUM. This has trigger a host of simultaneous launches, with issuers engaging in a fee-war over the past few days and introducing 'waiver' periods where fees will be reduced in the initial period. As of the time of this blog, the ETFs being launched are:
Investors are expected to be excited about the development, as it offers a more direct exposure to Bitcoin compared to futures-based ETFs. While futures ETFs involve contracts linked to the future price of Bitcoin, spot Bitcoin ETFs hold Bitcoin directly. This direct holding makes spot ETFs a more straightforward option for investors seeking to include cryptocurrency in their portfolios, as they will be able to do this directly within their brokerage account. After significant fee reductions over the past few days (as low as 20 bps), the comparative expense of holding a Bitcoin ETF for a year is potentially significantly lower than conducting a single trade on a cryptocurrency exchange- potentially making it an even more attractive option for cost-conscious investors. The approval of these Bitcoin ETFs reflects the financial sector's adaptability to new asset classes and innovations. It marks a significant evolution in the integration of cryptocurrency into traditional investment models.
Rimes' Pivotal Role in Data Management
In this landscape of innovation, Rimes is uniquely equipped to manage the complexities introduced by this new type of ETFs. Through our deep issuer, clearing agent and custodian relationships and extensive ETF data expertise, we rapidly and efficiently onboard these types of novel ETFs, ensuring that clients have immediate access to essential data. Our approach is meticulous and comprehensive; we maintain the exact baskets provided by issuers, ensuring no data point is lost in the normalization process. This level of precision and attention to detail is crucial, particularly with an asset as dynamic and rapidly evolving as cryptocurrency. This will allow you to easily distinguish between the different ETFs issued, as well as versus the existing futures-based ETFs, with all the relevant data points intact. For example, Rimes has already identified the differences between the holdings of the ETFs launched with additional cash or Contract For Differences (CFDs) present in some baskets.
Rimes' infrastructure is designed to adapt swiftly to market innovations, allowing for seamless integration of new ETF types into our expansive data management system. Our clients can confidently rely on the accuracy and timeliness of the information we provide, enabling them to make well-informed decisions in a market that is constantly advancing.
The launch of the first spot Bitcoin ETFs is not just a milestone for the cryptocurrency market; it's a bellwether for the broader financial sector's adaptability and innovation. As this new asset class gains momentum, Rimes is committed to staying at the forefront, offering unmatched data management solutions that align with the evolving needs of our clients. The integration of cryptocurrency into traditional investment models through these ETFs exemplifies the dynamic nature of today's financial markets. Rimes is proud to be part of this journey, providing the clarity and precision required in this complex and exciting new era of finance.