The Securities and Exchange Commission (SEC) has approved the first exchange-traded Bitcoin ETFs in the USA. Some products could go on sale as early as Thursday.
The US Securities and Exchange Commission (SEC) has cleared the way for exchange-traded Bitcoin ETFs. The SEC announced its decision on Wednesday evening after the US stock market closed.
According to its own information, the authority gave the green light to applications from asset managers BlackRock, Ark Investments and 21Shares, Fidelity, Invesco and VanEck, among others. They can now launch exchange-traded funds that invest directly in Bitcoins. Some products are scheduled to go on sale on Thursday.
After the SEC vote became known, the price of the cryptocurrency increased significantly again: at times, the price of a Bitcoin rose by up to 3.9 percent to $47,750, just below its 21-month high reached on Tuesday. The approval is a milestone in the history of Bitcoin and Co., says Timo Emden from Emden Research: “The thriller is over.”
Stock market regulator warns of risks
The SEC’s decision was eagerly awaited. Several asset managers had already applied for initial approvals to launch spot Bitcoin ETFs in 2013. However, the SEC has always rejected these on the grounds that the products are vulnerable to market manipulation.
And even after yesterday’s decision, SEC boss Gary Gensler emphasized that the approval does not mean the regulator’s support for Bitcoin. The stock exchange regulator always warns US investors about the risks of crypto investments such as the enormous price fluctuations. The commission emphasized that investors must be informed in detail about the investment products.
Advantages for investors
Nevertheless, investing in Bitcoin ETFs can also have advantages for investors, emphasizes Gerhard Summerer, Managing Director of DZ Financial Markets of the German DZ Bank in New York: “The big advantage of these ETFs is – if they are bought from companies with a high reputation like BlackRock – that they minimize the uncertainty and risks.”
Small investors who were previously not interested in Bitcoins because the currency was prone to fluctuations could now invest in crypto for the first time. Summerer believes that the competition from different providers could also be positive for investors – BlackRock has already announced that it wants to keep the fee for the Bitcoin ETF as low as possible.
Decision after legal defeat
The SEC still warns investors against investing in crypto. For years, the regulatory authority had blocked the approval of Bitcoin ETFs. But last year it suffered a defeat in court after the rejection of an application from Grayscale: an appeals court found that the decision was arbitrary because the SEC did not make clear the difference to other approved investments. The stock exchange regulator had already approved ETFs on Bitcoin future contracts in 2021.
With information from Antje Passenheim, ARD Studio New York
Antje Passenheim, ARD New York, tagesschau, January 11, 2024 2:56 a.m