(Bloomberg) -- Bitcoin briefly scaled $47,000 in a muted reaction after the US Securities and Exchange Commission approved exchange-traded funds that invest directly in the token, as traders wait to see how much money the products garner. 

The largest cryptocurrency was steady at $46,060 as of 7:48 a.m. Thursday in London after paring the earlier climb. Some view the SEC decision as a landmark step that widens the investor base for digital assets. Bitcoin had already jumped over 160% in the past 12 months in anticipation of the ETFs as well as looser monetary policy.

Other major cryptocurrencies were mixed. Ether, the second biggest token, stood out with a 9% advance in the past 24 hours to $2,587 on bets that it will be the focus of the next wave of spot crypto ETF products in the US.

Market watchers had wondered whether Bitcoin was ripe for a pullback from the actual green light for spot ETFs if speculators decide to bank some of the profits from the token’s months-long advance.

Read more: SEC Approves Bitcoin-Spot ETFs in Milestone for Digital Assets

‘Priced In’

The news had largely been “priced in” and inflows into the ETFs will now be closely watched, said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets.

The SEC authorized funds from asset management heavyweights BlackRock, Invesco and Fidelity as well as products from smaller competitors such as Valkyrie to begin trading Thursday. 

“Most of the money immediately moving into Bitcoin ETFs will be reallocations from other Bitcoin exposure,” said Leo Mizuhara, founder of DeFi institutional asset manager Hashnote. “It will take time for new money to flow into Bitcoin via the new ETFs.”

The SEC had opposed spot Bitcoin ETFs for more than a decade, while the crypto sector as a whole has faced withering criticism from the agency’s Chair Gary Gensler. He has repeatedly argued that the industry is rife with fraud and misconduct. The SEC cracked down on digital assets following a 2022 rout and collapses such as the bankruptcy of Sam Bankman-Fried’s FTX exchange.

Gensler’s Statement

But the SEC last year lost a key legal fight against asset manager Grayscale Investments, spurring speculation that the regulator would acquiesce to the spot ETFs. The digital-asset investment house is now converting the $29 billion Grayscale Bitcoin Trust, the largest fund investing in the token, into an ETF.

“While we approved the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse Bitcoin,” Gensler said in a statement. “Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto.”

Crypto supporters have offered various arguments in support of Bitcoin, all hotly contested. These include the claim that it is an inflation hedge and store of value — a kind of digital gold — that can bolster the risk-adjusted performance of diversified portfolios.

The fact that the US has allowed spot Bitcoin ETFs is “an important moment in the brief history of crypto, where crypto goes from a niche investment to a mainstream investment,” said Campbell Harvey, a finance professor at Duke University. “Many investors will seek to diversify their portfolios by adding some crypto exposure through these ETFs,” he said.

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