The Securities and Exchange Commission (SEC) has given approval for the first US-listed exchange-traded funds (ETF) to track Bitcoin, marking a significant milestone in the cryptocurrency market.
This move has opened up the possibility for 11 exchange funds for Bitcoin, providing new opportunities for investors who were previously unable to access cryptocurrency. Despite this, regulatory authorities still have some skepticism, as reported by The Guardian.
After an announcement from the SEC, the price of Bitcoin saw a rapid increase of over $1000. However, the SEC later clarified that the announcement was a result of a compromised social media account, diluting the initial excitement.
The @SECGov X account was compromised, and an unauthorized post was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— U.S. Securities and Exchange Commission (@SECGov) January 9, 2024
Despite the initial confusion, the SEC officially approved the ETFs within 24 hours. However, along with the approval came warnings about the volatility of cryptocurrency.
SEC Chairman Gary Gensler cautioned investors, stating, ““Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto.”
Commissioner Caroline Crenshaw also expressed concerns about the potential impact on the market and investors, emphasizing the need for caution.
What does the listing mean for Bitcoin?
With the approval of the ETFs, investors now have the option to invest in or trade Bitcoin without directly purchasing the cryptocurrency itself.
This listing represents a significant expansion for Bitcoin, as it eliminates the requirement for interested parties to acquire a digital wallet or open an account with a cryptocurrency trading platform like Binance or Coinbase.
Major fund managers such as BlackRock and Fidelity Investments played a crucial role in advocating for the ETF approval and will now manage the funds, positioning themselves to benefit from this new business opportunity.
The Guardian also reported a surge in the price of Ethereum, the second most popular cryptocurrency, fueled by speculation that fund managers will create ETFs for it following the Bitcoin listing.
