SEC Approves Bitcoin ETFs
- Category: News
(Source – Forbes)
Sec gives bitcoin ETFs approval, After a temporary setback on Tuesday, the Securities and Exchange Commission (SEC) granted approval on Wednesday for several investment firms to offer “spot bitcoin” exchange-traded funds (ETFs). This widely anticipated move is poised to democratize bitcoin investing, making it more accessible to Main Street investors without necessitating direct ownership of the digital asset.
In a statement on the SEC’s website, SEC Chair Gary Gensler emphasized caution, stating that while certain spot bitcoin ETF shares were approved for listing and trading, the SEC neither approved nor endorsed bitcoin. Gensler underscored the myriad risks associated with bitcoin and products linked to cryptocurrency.
The SEC faced a January 10 deadline to decide on applications from 11 firms seeking to offer bitcoin ETFs. Remarkably, the regulatory body granted approval to all 11 applicants. Bitcoin, the foremost cryptocurrency, currently boasts a market capitalization of around $900 billion and has experienced notable price volatility throughout its 15-year existence. Following an all-time high of nearly $69,000 in November 2021, bitcoin descended below $17,000 during the 2022 “crypto winter” but has mostly traded above $45,000 leading up to the SEC’s decision.
Timely Price Increase:
Approximately one hour after the announcement, bitcoin’s price increased by 0.3% to nearly $46,000, according to data on coinmarketcap.com.
On Tuesday, after the stock market closed, a false post on the SEC’s X account claimed approval for spot bitcoin exchange-traded products. Gensler promptly refuted the claim, and the SEC removed the post. The agency announced that the FBI was investigating the incident.
Investors should be aware that the price of bitcoin, whether invested in directly or through a ETF, remains subject to significant volatility. Gensler, earlier in the week, cautioned investors about the risks associated with crypto investing, citing the exceptional risk and volatility of crypto assets.
SEC Approves Bitcoin ETF Proposals
Despite the SEC’s approval, concerns persist. Better Markets, an investor watchdog group, strongly opposed the decision, citing the history of artificially inflated trading volumes in the bitcoin market. The group’s president and CEO, Dennis Kelleher, criticized the SEC for approving an investment vehicle that could expose Main Street Americans to a volatile and fraudulent financial product.
Conversely, crypto advocates welcomed the move, viewing the spot bitcoin ETF as a bridge between traditional finance and the evolving crypto landscape. Sheila Warren, CEO of the Crypto Council for Innovation, hailed the approval as a significant step toward inclusivity, allowing investors to participate in the bitcoin journey without the technical complexities of direct ownership.
