The US securities regulator, the SEC, has approved 11 US-listed exchange-traded funds (ETFs) for tracking bitcoin. This approval signifies a significant milestone for both bitcoin and the broader crypto industry. The decision opens the door for new investors who prefer a more straightforward investment approach, avoiding the complexities associated with purchasing bitcoin.
ETFs provide a convenient way to invest in assets or asset groups without the need to directly acquire the assets themselves. For instance, the SPDR Gold Shares ETF enables individuals to invest in gold without the hassle of storing or safeguarding physical gold bars.
Furthermore, ETFs, including those for bitcoin, can be easily traded on stock exchanges, offering investors flexibility and liquidity. This regulatory approval signals a departure from the traditional method of acquiring bitcoin, which involved setting up a digital wallet or creating an account on a cryptocurrency trading platform like Binance or Coinbase. Cryptocurrency advocates believe this development will propel the once niche and nerdy corner of the internet further into the financial mainstream.
The approved ETFs are products from major financial players such as Grayscale Bitcoin Trust GBTC, BlackRock’s iShares Bitcoin Trust (IBIT), ARK 21Shares Bitcoin ETF (ARKB), Bitwise Bitcoin ETF (BITB), Invesco Galaxy Bitcoin ETF (BTCO), WisdomTree Bitcoin Fund (BTCW), VanEck Bitcoin Trust (HODL), Franklin Bitcoin ETF (EZBC), Fidelity Wise Origin Bitcoin Trust (FBTC), Valkyrie Bitcoin Fund (BRRR) and Hashdex Bitcoin ETF DEFI.
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Despite granting approval for the new ETFs, the SEC emphasized its deep skepticism regarding cryptocurrencies, clarifying that the decision should not be interpreted as an endorsement of bitcoin.
Gary Gensler, the chairman of the agency, cautioned investors to exercise vigilance due to the numerous risks associated with bitcoin and related products. He stated, “Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”
Some commissioners expressed concern over the SEC’s decision to greenlight the funds. Commissioner Caroline Crenshaw voiced her apprehension, saying, “I am concerned that these products will inundate the markets and end up in the retirement accounts of U.S. households, exposing those who can least afford it to potential losses from the fraud and manipulation prevalent in the spot bitcoin markets.”