The U.S. Securities and Exchange Commission (SEC) on Wednesday approved 11 Exchange Traded Funds (ETFs) for bitcoin, opening the door to cryptocurrencies for many new investors. This would be the first U.S.-listed ETFs to track bitcoin.
The Commission said those approved include applications from BlackRock (BLK.N), Ark Investments/21Shares (ABTC.S), Fidelity, Invesco (IVZ.N) and VanEck.
Most of the products are expected to begin trading Thursday on traditional platforms like NASDAQ, according to the issuers. The approval has spiked the price of Bitcoin as well as other cryptocurrencies.
Despite the approval, the SEC said it was still deeply skeptical about cryptocurrencies, adding that its decision did not mean it approves or endorses bitcoin.
“We did not approve or endorse Bitcoin,” Gary Gensler, the agency’s chairman. “Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto.”
The price of Bitcoin sank to as low as $16,000 in November 2022. It has gained about 70% since October 2023. It is currently gaining 7.12%, trading at $48,513 at the time of this report, according to the data on Investong.com.
Other cryptocurrencies are also up, with Ethereum gaining 11% at $2,641.
Analyst have described the long awaited ETFs approval as a “a game-changer for bitcoin,” as it opens the door to cryptocurrencies to many new investors who don’t want to take the extra steps involved in buying actual bitcoin.
An ETF is an easy way to invest in assets or a group of assets without having to directly buy the assets themselves. For example, the SPDR Gold Shares ETF allows anyone to invest in gold without having to find a place to store a bar or protect it. ETFs are easily traded on the stock exchange.
Standard Chartered analysts this week said the ETFs could draw $50 billion to $100 billion this year alone. Other analysts have said inflows will be closer to $55 billion over five years.
“It’s a huge positive for the institutionalization of bitcoin as an asset class,” said Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities.
The approvals come a day after an unauthorized person published a fake post on the SEC’s account on social media platform X, saying the agency had approved the products for trading. The agency quickly disavowed and deleted the post.
On Wednesday,Cr said it is coordinating with law enforcement and the SEC’s own internal watchdog to investigate the incident.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.