US securities regulators granted approval on Wednesday for a set of bitcoin exchange-traded funds (ETFs), a highly anticipated decision expected to significantly impact the cryptocurrency market. The Securities and Exchange Commission (SEC) greenlit proposals for 11 ETFs to be listed on major exchanges, including the New York Stock Exchange, “on an accelerated basis,” according to a 22-page order.
ETFs, traded on public markets, provide investors with exposure to asset price movements without direct ownership of the underlying assets. While the funds themselves invest in digital currency, their approval marks a pivotal moment for the digital asset space, indicating a move towards mainstream legitimacy and acceptance, explained Thomas Tang, VP of Investments at Ryze Labs.
Bitcoin ETFs, existing within a regulated framework, inject institutional credibility into the digital asset realm, Tang added. Traditionally, investors seeking bitcoin exposure had to navigate cryptocurrency exchanges, but the recent approval opens up trading through mainstream financial institutions like Fidelity and BlackRock.
Anticipation of SEC approval had heightened volatility in the digital currency market. On Tuesday, bitcoin prices reached a 22-month high of $47,914 after a fake SEC post on social media falsely claimed approval. SEC Chairman Gary Gensler later clarified that the market regulator’s account had been “compromised.” The SEC had previously blocked similar investment vehicles but changed its stance after a court ruling criticized the agency’s reasoning for denying a Grayscale ETF.
Gensler emphasized key investor protections in Wednesday’s approval, including disclosure requirements and listing on regulated exchanges with anti-fraud and manipulation rules. He cautioned investors about the risks associated with bitcoin and crypto-related products, emphasizing their speculative and volatile nature, as well as their history of use in money laundering and illicit activities.
Representative Patrick McHenry welcomed the SEC’s decision, stating it provides greater access to transformative technology for investors and markets.
