24 hours after infamous "fake tweet incident", U.S. Securities and Exchange Commission has finally approved Bitcoin ETF applications, ending a long back-and-forth between it and the various firms, which in August 2023 culminated into court ruling against SEC in the "SEC vs Greyscale" case.

11 companies offering ETF include well known names like BlackRock, and most will be using Coinbase as custodian of Bitcoin purchased for these funds.

Arrival of spot traded Bitcoin ETFs is celebrated by most Bitcoin proponents for two main reasons - the institutionalisation of Bitcoin and new capital inflows. The first means that Bitcoin effectively is validated as legitimate asset and likelihood of it being outlawed in United States has come down to almost zero. The second means new bids for physical Bitcoin, as there are thousands of individuals or corporations which would like to get exposure to Bitcoin but do not want to jump though the various hoops that physical Bitcoin exchanges force you to, and do not want to educate themselves on how to custody Bitcoin themselves.

Bitcoin purists point out the dangers of owning ETF instead of physical Bitcoin, such as probability of confiscation and risk of fraud in the chain of custody between the ETF buyer and the private key stored somewhere in Coinbase or whoever is chosen to safeguard your Bitcoin.

Such risks are not extreme enough to dissuade anyone from investing small amounts in such ETF products, but they do exist and should be priced in whenever you make a choice between buying physical or "paper Bitcoin".

I am using the term "physical Bitcoin" that may trigger some gold bugs. I do it on purpose because I do think it is not wrong to call information stored on physical medium as physical entity. Bitcoin stored on a piece of paper or flash drive is very real and very physical.