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SEC Bitcoin ETF Approval

Article Issue #43
SEC Bitcoin ETF Approval.

The new Eocnomocial era for Bitcoin

13 Jan, 2024 | BANKSY

The Securities and Exchange Commission authorized financial firms to offer Bitcoin investment related products in a decision that came a long way after several requests and denials in the past years. The Exchange approved 11 applications to offer exchange-traded funds linked to Bitcoin. This could be a landmark moment for the cryptocurrency market that may increase investment in the Bitcoin technology.

Some of the largest financial firms in the world, including the asset managers BlackRock and Fidelity, were approved to offer E.T.F.s, on traditional platforms like the Nasdaq. The approvals were a sign that mainstream financial institutions want to deal in digital currencies despite its volatility.

The E.T.F. means that rather than storing Bitcoin in online wallets, investors in would own shares in funds containing the digital currency. This means gaining exposure to the market without some of the risks and inconveniences associated with.

Crypto supporters had pushed for the introduction of a Bitcoin E.T.F. for years, hoping it would accelerate adoption of cryptocurrencies more broadly. In 2021, the S.E.C. approved funds that track the fluctuations of Bitcoin without holding the currency itself. But the agency argued that a fund that contained Bitcoin would pose big risks to consumers, citing illegal manipulation of crypto prices, among other issues. However those arguments failed in court. In August, the S.E.C. lost a legal battle with the crypto asset manager Grayscale Investments, one of the firms that applied to offer the product, clearing the path to a Bitcoin E.T.F.

Skeptics still argue the ETF’s will not solve any of the fundamental problems in crypto, like fraud and volatility. In a public letter, the nonprofit advocacy group Better Markets said the approval of Bitcoin E.T.F.s would be a “historic mistake almost certainly leading to massive investor harm.” While others believe that the products won’t provide much of a boost to crypto prices yet still, the industry celebrates this landmark.