US regulators have, for the first time, approved the establishment of exchange-traded funds (ETFs) based on the digital currency bitcoin. This significant development opens Wall Street’s doors to Bitcoin and is a major milestone for the digital asset sector, currently valued at approximately $1.7 trillion.
The Securities and Exchange Commission (SEC), tasked with investor protection as part of its three-part mandate, has approved funds from industry heavyweights such as Blackrock, Invesco, and Fidelity. Smaller competitors, including Valkyrie, an investment fund, received approval to start trading on Thursday, according to Bloomberg.
These approvals represent a notable shift by the SEC, which has opposed such decisions for over a decade. This opposition dates back to when Tyler and Cameron Winklevoss first proposed a Bitcoin ETF in 2013.
Bitcoin ETFs Approved: SEC Warns as Market Soars 160%
A turning point occurred last June when investment giant Blackrock surprisingly applied to the Commission to establish a Bitcoin ETF. An Appeals Court subsequently ruled that the SEC’s earlier decision to reject the application was “capricious” and “arbitrary.” This ruling buoyed the cryptocurrency market in the year’s second half, with Bitcoin surging more than 160% as investors speculated on the SEC’s potential approval of such ETFs.
Regarding the deadline for this decision, SEC Chairman Gary Gensler issued an official statement. “Today’s approval of the listing and trading of certain spot bitcoin ETF shares does not imply our approval or endorsement of bitcoin,” he stated. Gensler urged investors to remain cautious about the risks associated with Bitcoin and products tied to cryptocurrencies.
Gensler’s statement, which essentially means “trade is allowed, but we do not support the currency of that trade,” arrives just days before the January 15 deadline for deciding on bitcoin ETF funds. This timeline coincides with a recent incident involving a fake tweet on the official SEC account. It prematurely announced the approval of such ETFs.
The cryptocurrency market and Wall Street should respond positively to this news.
