In a groundbreaking development, the US regulator has given the green light to exchange-traded funds (ETFs) specifically focused on direct investments in Bitcoin. This move is being hailed as a pivotal moment in the US financial landscape, heralding increased accessibility to the foremost cryptocurrency within Wall Street and beyond. Notably, the Securities and Exchange Commission (SEC), after a decade of consistent rejections citing concerns about potential manipulation, has executed a significant about-face by granting approval for Bitcoin ETFs.
In a noteworthy development, the US Securities and Exchange Commission (SEC) has granted approval to 11 applications, including those from prominent entities such as BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck, as per an official notice on its website. This green light paves the way for the commencement of trading for some of these products as early as Thursday.
According to industry experts, this decision has the potential to revolutionize the landscape for Bitcoin, providing both institutional and retail investors with a means to participate in the world’s largest cryptocurrency without the necessity of direct ownership. This approval is seen as a significant catalyst for the cryptocurrency sector, which has faced challenges amid a series of controversies and scandals in recent times.
Standard Chartered analysts suggest that the influx of $50 billion to $100 billion into ETFs this year could potentially propel Bitcoin’s price to reach as high as $100,000.
Bitcoin rises to $47,300, 3% surge; 70% increase, ETF hopes
Bitcoin, currently standing at $47,300, has experienced a 3% increase. The cryptocurrency has surged over 70% in the past months due to expectations surrounding an ETF, reaching its highest point since March 2022 earlier this week.
Following Grayscale Investments’ significant win against the SEC, a federal appeals court overturned the rejection of Grayscale’s Bitcoin trust conversion into an ETF. The court deemed the denial “arbitrary and capricious” as the SEC had not clarified its inconsistent treatment of comparable products. In 2021, ETFs holding Bitcoin futures received approval.
Chair Gary Gensler stated that the SEC’s approval of the applications was influenced, in part, by the SEC’s defeat to Grayscale.
“Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot Bitcoin ETP shares,” Gensler said.
For years, cryptocurrency supporters have maintained that a so-called spot fund that invests directly in Bitcoin would benefit investors and move the industry closer to the more highly regulated realm of traditional finance.