Bitcoin ETFs get green light from US regulator

On Wednesday, the US Securities and Exchange Commission (SEC) gave its exchange traded funds (ETFs) that track the price of bitcoin, the world’s largest cryptocurrency. This is a breakthrough for the crypto industry, which has been seeking regulatory approval for such products for years. The SEC approved 11 applications from some of the biggest names in the financial sector, including BlackRock, Fidelity, Invesco, and VanEck, to offer bitcoin ETFs.

These products, which could start trading as early as Thursday on platforms like Nasdaq, will allow investors to buy and sell shares of funds that hold bitcoin without dealing with the complexities and risks of owning and storing the digital asset directly. The news of the SEC approval sent Bitcoin’s price soaring on Tuesday when a post on the regulator’s official X account announced the decision.

However, the price quickly fell back when SEC chair Gary Gensler said the account was hacked and the post was fake. The X account was compromised, and an unauthorized post was posted. The SEC has not approved the listing and trading of spot bitcoin exchange traded products. However, bitcoin enthusiasts did not have to wait long, as the SEC confirmed the approval in a regulatory filing on Wednesday.

Bitcoin’s price rose slightly after the announcement, trading above $60,000 when writing. The approval is seen as a sign of growing acceptance and legitimacy of crypto by mainstream financial institutions, which have been wary of the volatile and unregulated nature of the digital asset class. The approval also opens the door for more institutional and retail investors to enter the crypto market, potentially boosting the demand and value of Bitcoin and other cryptocurrencies.

However, the SEC approval does not mean that the regulator endorses or approves Bitcoin itself, as Mr. Gensler stated. He said that the SEC did not approve or endorse Bitcoin and that investors should be aware of the many risks involved in crypto related products. “We did not approve or endorse Bitcoin,” he said.

“Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto.” He added that the SEC’s role was to protect investors and promote fair and efficient markets. The regulator would continue to monitor the crypto industry and take action against any misconduct or fraud.

The SEC approval of bitcoin ETFs is a landmark moment for the crypto industry, but it also comes with challenges and responsibilities. Investors should do their due diligence and understand the risks and rewards of investing in this new and evolving asset class..