European cryptocurrency experts have welcomed the US regulator’s hotly-anticipated approval of the first spot Bitcoin exchange-traded funds, calling the recognition “a significant milestone in the institutional support of digital assets”.

Speaking after the Securities and Exchange Commission (SEC) approved on Wednesday the launch of the spot Bitcoin ETFs, Arnab Sen, chief executive officer of GFO-X, a crypto derivatives venue going live in the coming months, said the consent is a shot-in-the-arm for institutions wanting to buy cryptocurrencies.

Sen said: “The approval of Bitcoin ETFs by the SEC is a significant milestone in the institutional support of digital assets as a mainstream asset class. The market needs this legal and regulatory clarity, alongside trusted market infrastructure, to inspire confidence in spot and derivatives trading.”

GFO-X, which secured last month $30m (£24m) in a funding round led by M&G Investments, is pitching itself as the regulated crypto derivatives market for institutional investors like M&G.

Sen added: “Regulated venues delivering institutional grade futures and options products, which typically underpin structured products, are crucial to attracting institutional investors to this asset class.”

Pete Osborne, a partner at blockchain advisory firm Appold, agreed, suggesting the approval could be “the bridge that institutional investors have been waiting for to enter the digital asset market”.

He added: “It mitigates some of the primary concerns they have, such as regulatory compliance, operational requirements and custody oversight, making Bitcoin a more attractive and easily accessible component of diversified investment portfolios.”

The Appold partner said the Bitcoin ETFs could be attractive to US 401k holders seeking diversification.

Robert Gaskell, a partner at Appold, went on to suggest cryptocurrency purists may have some reservations about the SEC mandate as institutional participation is not really consistent with the original philosophy of cryptocurrencies.  

“The fundamental principles in the Bitcoin white paper describe transacting value through the internet and being an open technology for all. Bitcoin has historically been a tool for the technologically aware and if institutions provide services around Bitcoin this could reach a wider market.”

Gaskell added: “Time will tell if institutions that control large amounts of Bitcoin negatively impact the principles of the white paper.”

Osborne said the ETFs are a positive step but investors must be prudent when investing in cryptocurrencies. “It's crucial to remain cautious about the volatility and regulatory uncertainties inherent in the crypto market,” he said.

Osborne and Gaskell said in November the spot Bitcoin ETFs are interesting because they allow firms to speculate on bitcoin price movements without touching the underlying asset.

Crypto specialist CCData said last week trading in digital assets jumped a third in December due to the positive shift in institutional sentiment linked to the prospect of the ETF approval.