Spot-bitcoin ETFs are exchange-traded funds allowed by the SEC to invest directly in bitcoins.

The SEC has rejected every application for spot ETF approval in the past decade, but speculation suggests approval could occur in January 2024.

The fake SEC approval of the Bitcoin ETF caused Bitcoin price volatility on Tuesday, January 9. Bitcoin is back at $46,000 after reaching $48,000 on Tuesday.

This would allow investors to directly expose themselves to bitcoin through their brokerage accounts, leading to higher liquidity and stability of crypto prices.

If approved, spot ETFs could result in an inflow of $3 billion in one day and up to $55 billion in the next five years.

Bitcoin prices have rallied over 60% since October due to the expectation of SEC greenlighting spot ETFs.

There are also speculations that the regulator might approve ether ETF as well, leading to a surge in 'ether' trading around $2,400 a unit.

Traders are seeking protection from potential price drops in bitcoin as the ETF deadline approaches.