Bitcoin ETFs: Wall Street Spent a Decade Saying No, Then Took In $57 Billion

On the afternoon of 9 January 2024, the official X account of the US Securities and Exchange Commission announced that the agency had approved funds that hold bitcoin and trade on the stock market. Bitcoin jumped by more than $1,000. Then the SEC's chairman, Gary Gensler, said the account had been hacked and the post was false. The price fell back by more than $2,000.

The next day the approval was real. On 10 January 2024 the SEC cleared 11 spot bitcoin exchange-traded funds at once, and they began trading on 11 January. An exchange-traded fund, or ETF, is a fund whose shares trade on a stock exchange like any company's shares; a spot bitcoin ETF holds actual bitcoin, so buying a share is like buying a slice of a vault of coins. Wall Street firms had been asking for one for more than ten years. In the 33 months since, investors have put about $57 billion more into these funds than they have taken out, and in mid-October 2026 the funds held about $105 billion.

Ten years of no

The first application came from Cameron and Tyler Winklevoss, the twins best known for their legal fight with Mark Zuckerberg over Facebook, who filed for a Winklevoss Bitcoin Trust in July 2013. The SEC turned it down on 10 March 2017. Its reason was that the big markets where bitcoin traded were unregulated, so the agency could not be confident that prices were not being manipulated. Bitcoin fell as much as 18 percent that day. The SEC rejected the Winklevoss plan again in July 2018, by three votes to one, with Commissioner Hester Peirce dissenting, and a long line of applications from other firms met the same answer.

The breakthrough came in court. Grayscale Investments ran the Grayscale Bitcoin Trust, a fund that held bitcoin but could not easily redeem shares, so its price often sat well below the value of its coins. Grayscale wanted to convert it into an ETF and, when the SEC refused, sued. On 29 August 2023 a panel of the US Court of Appeals for the District of Columbia Circuit ruled unanimously that the SEC's refusal was "arbitrary and capricious", because the agency had already approved funds based on bitcoin futures, contracts that bet on the future price, and had not explained why funds holding real bitcoin were different. The court sent the decision back to the SEC.

The fake approval and the real one

The false post of 9 January was a SIM swap, a fraud in which a criminal persuades a phone company to move someone's number to a new SIM card. Eric Council Jr., of Athens, Alabama, used a fake ID at an AT&T store in Huntsville to take over the phone number linked to the SEC's X account, then passed the account's reset codes to accomplices. He pleaded guilty and in May 2025 was sentenced to 14 months in prison.

Gensler's statement on the real approval made his views plain. "We did not approve or endorse bitcoin," he wrote, calling it "primarily a speculative, volatile asset that's also used for illicit activity." The SEC said it was approving the funds because the Grayscale ruling had changed the legal ground beneath it.

Wall Street moves in

The funds changed who owned bitcoin. Anyone with a brokerage account or retirement account could now buy it through a ticker symbol, without dealing with crypto exchanges or storing coins. Most of the funds pay Coinbase, the largest US crypto exchange, to hold their coins.

BlackRock's iShares Bitcoin Trust, ticker IBIT, became the fastest-growing ETF on record. It reached $10 billion of assets in 49 trading days, according to Bloomberg ETF analyst Eric Balchunas; the previous record was close to three years. Money flowed the other way at Grayscale's converted fund, GBTC, which charged 1.5 percent a year against IBIT's 0.25 percent: $7.4 billion left it in its first 30 trading days.

BlackRock's chief executive, Larry Fink, had made the journey himself. In October 2017 he called bitcoin "an index of money laundering". In July 2023, weeks after BlackRock filed for its fund, he told Fox Business that bitcoin was "digitalising gold".

The record and the bleed

The funds' high point came with bitcoin's. In early October 2025, as bitcoin set a record of $126,080, IBIT alone held about $99 billion, according to ETF.com. The crash that began on 10 October 2025 reversed the flow. Bitcoin fell below $60,000 at the turn of June and July 2026. June 2026 was the funds' worst month since launch, with net withdrawals of between $4.1 billion and $4.5 billion depending on the data provider (SoSoValue and Farside Investors), most of it from IBIT.

The same structure that helped push bitcoin up now helped pull it down. When investors sell ETF shares, the fund has to sell bitcoin to pay them, so the funds tie bitcoin's price more closely to the moods of stock market investors than to anything happening on the bitcoin network itself.

By 14 October 2026 the 11 funds held about $105 billion between them (TFTC; SoSoValue put it at $106 billion on 12 October), with bitcoin near $82,000. IBIT held $66.2 billion on 15 October, according to iShares, still by far the largest. Fidelity's FBTC, at $14.7 billion, and Grayscale's GBTC, at $10.4 billion, came next in SoSoValue's figures for 12 October.