• Bitcoin wobbled then rose past $46,000 following regulatory approval of spot bitcoin ETFs.
  • Ether jumped 10% to a 20-month high as ETF speculation turns to the second-largest asset.
  • The wider impact of the ETFs will take months to see, 21Shares co-founder Ophelia Snyder said in an interview.

Bitcoin (BTC) on Wednesday wobbled, then climbed to $46,500, then slid nearly 2% in a volatile period as the U.S. Securities and Exchange Commission (SEC) approved bitcoin ETFs, a landmark decision for the digital asset industry.

Earlier, the largest and original cryptocurrency dropped to $45,000 from $46,500 after Cboe, one of the U.S. exchanges that sought to list these products, retracted a filing related to the applications – spooking investors. Those fears abated as experts said this was probably a procedural mistake and that Cboe simply posted the documents too early.

But investors were on edge because of a fake tweet on Tuesday from the SEC’s official X (formerly Twitter) account that falsely said the ETFs had been approved. The SEC quickly confirmed their account had been “compromised” by an unknown person and the post was false.

For full coverage of bitcoin ETFs, click here.

Bitcoin’s flat price action after the decision actually arrived on Wednesday indicated that SEC approval was mostly “priced in,” market analyst Alex Kruger, co-founder of Asgard Markets, noted in an X post.

Ether (ETH), the second-largest crypto by market cap, jumped 10% and exceeded $2,500 for the first time in 20 months as attention turns to spot-based ether ETF applications already filed to the agency.

Shares of the Grayscale Bitcoin Trust (GBTC), the largest closed-end bitcoin fund that now has permission to convert into an ETF, popped to $40, their highest price since December 2021, TradingView data shows.

The stock price of Coinbase (COIN), the digital asset exchange whose custody service plays a key role for most bitcoin ETF issuers, was flat around $151. Bitcoin miners Marathon Digital (MARA) and Riot Platforms (RIOT) also remained unchanged.

Anticipation of the first bitcoin ETFs in the U.S. that can hold bitcoin, instead of just derivatives, has been a boon to the crypto market since Wall Street giant BlackRock filed paperwork in June to create one – a move soon followed by other applicants.

These vehicles are considered superior to already listed futures-based offerings, with bulls betting they will attract significant inflows to the largest cryptocurrency.

What’s next for crypto prices

Despite 10 years of failed attempts to list spot bitcoin ETFs in the U.S., most market observers overwhelmingly expected regulatory approval this time, given BlackRock’s track record of successful applications and asset manager Grayscale’s court victory over the agency in August.

Now, all attention turns to how much demand these investment vehicles will attract when they start trading.

While the ETFs may trade as soon as Thursday, the wider impact of the products will be seen in months, Ophelia Snyder, co-founder of crypto investment product issuer 21Shares, said in a CoinDesk interview.

Read more: Bitcoin ETF Listings Will Be Quick but Money Flows Could Take Months: 21Shares Co-Founder

Michael Silberberg, head of investor relations at crypto hedge fund Alt Tab Capital, said to expect “frothy price accumulation as capital will flow into the market from a new class of institutional buyers to crypto.”

Read more: Why Is a Bitcoin ETF a Big Deal? Gold Provides a $100 Billion Answer

Bartosz Lipinski, CEO at crypto trading platform Cube.Exchange, pointed out that ether outperformed bitcoin amid the news, suggesting that altcoins will also benefit.

“It’s been a while since the second-largest digital asset moved 10% in a single day, so this is rather substantial,” Lipinski said in an emailed note.

“Looking forward, it would make sense to see BTC eventually resume rallying higher as supply becomes more scarce while these 11 ETFs begin to gobble up significant amounts of supply,” he explained. “With bitcoin potentially becoming harder to buy, it would also make sense that other coins begin to fill the void left behind.”

“ETH, solana (SOL), Polygon (MATIC), and others could greatly benefit from this desire to find additional opportunities elsewhere in the digital assets ecosystem,” Lipinski added.

UPDATE (Jan. 10, 22:35 UTC): Updates BTC price action. Adds comments from analysts throughout the story.

Edited by Marc Hochstein and Nick Baker.