(Bloomberg) -- Bitcoin pared gains after surging past $49,000 for the first time since December 2021 with trading commencing for the first US exchange-traded funds that invest directly in the biggest cryptocurrency.

The token had advanced as much as 6.7% to $49,021, buoyed by the approval of spot Bitcoin ETFs by the US Securities and Exchange Commission after markets closed on Wednesday. It was recently trading at around $46,300. Most smaller tokens, such as Ether, Cardano and Polkadot were higher.

More than $4.6 billion changed hands in the first day of trading for the ETFs. The Grayscale Bitcoin Trust saw $2.3 billion in volume, according to data compiled by Bloomberg. When the first Bitcoin futures fund began trading in 2021, it saw turnover of almost $1 billion during the entire day. At the time, the futures fund debut was the second-most heavily traded fund on record.

Read more: Why the Bitcoin ETF Was Such a Long Time Coming: QuickTake

“The approval should be very bullish mid- and long-term, but for the short-term it remains to be seen,” Jaime Baeza, founder and managing partner at crypto hedge fund AnB Investments. said in text message. “The market had (almost) fully priced in the approval (which is being partially confirmed by the lack of a super rally), and it remains to be seen if we get the typical “buy the rumor - sell the news” type of action in the short-term.”

Shares of so-called crypto companies slumped. Bitcoin proxy MicroStrategy fell for a fifth day, while miners Marathon Digital and Riot Platforms were both down more than 12%. Coinbase Global, the biggest US crypto exchange, fell 6.7%. 

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.

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 has now converted the roughly $29 billion Grayscale Bitcoin Trust, the largest fund investing in the token, into an ETF.

“The ETF is effectively a watershed moment for financial advisers who now must have an opinion on this asset-class,” said Sui Chung, chief executive of data provider CF Benchmarks, which supplies indexes for several of the approved ETFs. “They might still not recommend it to their clients, but the fact it’s now available through a regulated product means they must at least have a viewpoint. This could open the door to a much more steady flow of interest and flows into the asset-class.”

--With assistance from Emily Nicolle.

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