SEC approves Bitcoin ETF for some investment companies

new york
CNN
—

After a false start on Tuesday, the Securities and Exchange Commission on Wednesday approved some investment companies to offer “spot bitcoin” exchange-traded funds.

The regulator’s long-awaited move is expected to make Bitcoin investing more accessible, eliminating the need for Main Street investors to directly own the digital asset.

SEC Chairman Gary Gensler made the announcement in a statement on the SEC’s website. The agency continues to remain vigilant. “While today we have authorized the listing and trading of certain Spot Bitcoin ETP shares, we do not endorse or endorse Bitcoin. “We need to remain vigilant about the myriad risks that may arise,” he wrote.

The SEC had set a January 10 deadline for making a decision on just one of the 11 companies that applied to offer a Bitcoin ETF. All 11 were offered approval on Wednesday.

The current market capitalization of Bitcoin, the major cryptocurrency, is approximately $900 billion. The company has experienced volatile price fluctuations throughout its 15-year history. Most recently, after hitting a high of nearly $69,000 in November 2021, it fell below $17,000 in the 2022 “crypto winter” and nearly $45,000 heading into the SEC decision. The stock is trading at a price movement that exceeds that of the stock.

About an hour after Wednesday’s news, Bitcoin prices rose 0.3% to nearly $46,000, according to data from Coinmarketcap.com.

After the stock market closed on Tuesday, a false post was posted to the SEC’s X account stating that the regulator had approved the listing and trading of a Bitcoin spot trading product.

This was quickly debunked by Gensler and the SEC removed the message. According to X, “unidentified individuals now have control over phone numbers associated with the organization.” @SECGov I was in charge of posting “accounts via third parties.” On Wednesday, the SEC announced that the FBI was investigating the matter.

For those looking to jump on the Bitcoin bandwagon, it’s important to note that the price of Bitcoin fluctuates just as much whether you invest directly on your own or through an ETF.

Earlier this week, Gensler I posted a thread on X Warning investors about the risks of cryptocurrency investing in general. “Investing in crypto assets is highly risky and often volatile. Many major platforms and crypto assets have gone bankrupt or lost value. You are at grave risk,” his post reads.

This sentiment was echoed by many financial advisors and investor watchdog group Better Markets, which strongly opposed the SEC’s approval of Bitcoin ETFs. Among the objections is a history of artificially inflating trading volumes in the Bitcoin market, known as “wash” trading.

In a scathing statement after the SEC’s announcement, the group’s president and CEO Dennis Kelleher relented. “As the blatantly lawless crypto industry collapses and burns with mountains of arrests, convictions, bankruptcies, lawsuits, scandals, huge losses, and the victimization of millions of investors and customers, the SEC Who would have thought that would come to the rescue with: a reliable and accessible investment vehicle that could mass sell worthless, unstable, and known fraudulent financial products to Americans on Main Street? to approve.”

Of course, there are many crypto supporters who are very happy with this move. “The Spot Bitcoin ETF is a bridge between traditional finance and the burgeoning world of cryptocurrencies. Enabling investors to join the Bitcoin journey without the technical hurdles of direct ownership is a key element of inclusivity. This is an important step towards the future,” said Sheila Warren, CEO of the Crypto Council for Innovation, in an emailed statement.

Here is the complete list of companies that have received SEC approval to launch Bitcoin ETFs: Ark Invest and 21 stocks. Bitwise, BlackRock, Fidelity, Franklin Templeton, Grayscale, Hashdex, Invesco, WisdomTree, Valkyrie, VanEck. Some of the company’s ETFs are expected to start trading as early as tomorrow.