The US regulator has approved bitcoin ETFs – this time for real
It is expected that ETFs will facilitate the process of investing in cryptocurrencies (without directly buying and storing bitcoins).
An ETF (Exchange Traded Fund) is a fund whose manager (ETF provider) collects company shares into one portfolio based on certain characteristics and sells them on the stock exchange.
According to Bloomberg, the Securities and Exchange Commission on Wednesday approved ETFs registered in the United States to track bitcoin. The commission accepted 11 applications, including those from BlackRock, Ark Investments/21Shares, Fidelity, Invesco and VanEck, despite warnings from some officials and investor advocates that the products carry risks.
US financial regulators have long been wary of bitcoin and other cryptocurrencies.
“Bitcoin is a mostly speculative, volatile asset that is also used for illegal activities. Although we approved the ETP today, we did not approve bitcoin. Investors should be cautious about the many risks associated with bitcoin and products whose value is linked to cryptocurrency,” wrote SEC Chairman Gary Gensler.
On Tuesday, the day before the decision was made, the official SEC account at X was hacked. The attackers posted a misleading tweet that the ETF had been approved, causing a temporary spike in bitcoin prices. The investigation is currently underway.
Reuters writes that analysts at Standard Chartered said that ETFs could raise between $50 and $100 billion this year alone. Other analysts say that the revenues will be closer to $55 billion within 5 years.
According to CoinGecko, as of Wednesday, the market capitalization of bitcoin was over $913 billion. According to the Investment Company Institute, as of December 2022, the total net assets of US ETFs amounted to $6.5 trillion.
