The US Securities and Exchange Commission (SEC) opened the door to Bitcoin exchange-traded funds (ETF) on Tuesday. This step was expected. The day before, a fake message on the SEC’s hacked account on Elon Musk’s online service X (formerly Twitter) had briefly anticipated permission.
The decision allows listed funds in the US that invest directly in Bitcoin (Bitcoin spot ETFs). Applications from investment heavyweights Blackrock and Fidelity were approved, among others.
Green light not entirely voluntary
The SEC is generally skeptical of crypto investments and has been resistant to allowing spot ETFs for years. She didn’t give the green light entirely voluntarily. Last year, the supervisory authority suffered a defeat in court following rejecting an application from Grayscale. An appeals court found the decision was arbitrary because the SEC did not make clear the difference from other approved investments. ETFs on Bitcoin future contracts had already been approved in 2021.
Shortly followingwards, BlackRock first rushed forward with an application – and it was generally assumed that the SEC had little scope for saying no following the court decision. This contributed to the rise in Bitcoin’s price since last year. After the SEC vote became known, the price rose once more by a good three percent and one Bitcoin was traded for around 47,500 dollars (43,394.85 euros).
SEC warns investors regarding risks
At the same time, SEC boss Gary Gensler emphasized that the approval does not mean support from the regulatory authority for Bitcoin. The SEC always warns US investors regarding the risks of crypto investments such as the huge price fluctuations. Bitcoin, the oldest and best-known digital currency, fell by more than 60 percent in 2022 – and the price has more than doubled since the beginning of last year.
Agency filings showed that two Democratic members of the SEC’s five-member governing body voted once morest the approval. At the same time, the commission emphasized that investors must be informed in detail regarding the investment products. And the marketplaces on which the funds are traded already have rules once morest fraud and manipulation.
