• The crypto community finally got the gift it’s been asking for: a bitcoin ETF.
  • After years of lobbying, a lawsuit, and one very public false alarm, the SEC announced Wednesday it approved spot bitcoin ETFs for trading in the US.
  • Fidelity, BlackRock, VanEck, and Grayscale were among the 11 bitcoin ETF applications that received approval on an “accelerated basis” from the SEC.

It’s a big reversal for the regulator, as SEC Chair Gary Gensler has previously taken a hardline approach to crypto.

So why does it matter? In the simplest of terms, a bitcoin ETF represents a more palatable and straightforward way for both people and firms to invest in bitcoin.

The process of buying and selling bitcoin has become much more mainstream compared to a decade ago, but it's not without its headaches. Meanwhile, bitcoin futures, which have been around for years, aren't as accessible to mom-and-pop investors.

But a bitcoin ETF is the easiest way for even the most skeptical investors to gain exposure to the cryptocurrency. And with traditional financial firms managing some of the ETFs, there is an added layer of security for those who haven't yet bought into the digital-currency ecosystem.

Beyond representing another way to invest in bitcoin, the ETFs are also the final piece of the puzzle for large institutional firms looking to trade in the space.

The ability to buy and sell bitcoin as a currency, a future, and an ETF means firms can develop a much more complete trading strategy with the necessary hedging their risk department might require.

Foto: Namthip Muanthongthae/Getty Images

The approval of a bitcoin ETF will likely lead traditional Wall Street firms to push deeper into the space, something many in the crypto industry have been begging for.

It seems undeniable this will ultimately lead to a boon for bitcoin. Fundstrat's Tom Lee suggested the price of bitcoin could surge to $500,000 in the next five years. (To be sure, the price of bitcoin initially dropped 1% off the back of Wednesday's news.)

But I question the role crypto-native companies — most of whom have been eager for this to happen all along — will play as things really take off.

Wall Street is a zero-sum game where playing nice isn't the standard. Early adopters of crypto might have deep knowledge or expertise of the space, but that doesn't guarantee them a seat at the table going forward.

Factor in how some of the industry's high-profile names have had serious legal issues — most notably FTX and Binance — and traditional firms might not be as quick to establish partnerships.

The future definitely seems bright for crypto. But what's not as clear, or bright, is what happens to some of the firms who helped get it here.