The first funds are expected to start trading at market opening Thursday, with BlackRock leading the way with its iShares Bitcoin Trust. Other top institutions primed to begin trading include incumbents such as Fidelity and Invesco and relative newcomers like Grayscale and Ark Invest.

The ruling comes after a US federal appeals court in August sided with Grayscale in a lawsuit against the SEC after the regulator denied an application to convert the Grayscale Bitcoin Trust into an exchange-traded fund, leading to increased pressure on the regulator to correct its cautious stance.

The much anticipated announcement comes as the SEC faces scrutiny over the security of its X account, which was hacked and used to spread the news on Tuesday.

With the ruling now in force, institutional and retail investors will be able to gain access to cryptocurrencies through regulated institutions, without the risks inherent in buying from unregulated exchanges and aithout the need for a crypto wallet.

Dhruvil Shah, SVP, technology at Liminal Custody Solutions, comments: “The digital asset industry is currently witnessing its defining moment. I think this is a watershed moment for the crypto industry as a regulated bitcoin financial product in one of the largest economies of the world will create a huge influx of capital into the crypto market. The approval of bitcoin spot ETF will prove highly beneficial for the growth of sectors like blockchain, decentralised finance, BTC ordinals, and digital asset custody, as the demand for such services will witness explosive growth"

Others fear that the approval could force a stampede into a market characterised by wild price fluctuations and repeated scandals by novice investors.

Dennis Kelleher, president of Better Markets, condemned the ruling as “a historic mistake that will not only unleash crypto predators on tens of millions of investors and retirees but will also likely undermine financial stability."