SEC Chairman Gary Gensler said in a statement: “While we approved the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse Bitcoin.” “Investors should be cautious about Bitcoin and its Value caution due to the myriad risks associated with cryptocurrency-related products.”
Over the past 10 years, the U.S. Securities and Exchange Commission (SEC) has rejected any attempts to create a Bitcoin ETF, a group of assets similar to a mutual fund. However, unlike mutual funds, these instruments are traded on exchanges and stock market participants can easily buy and sell them. Here’s what’s crucial – it means, basically, you can invest in Bitcoin without having to set up your own wallet.
For some investors who have been waiting on the sidelines, this may be enough to take a plunge into cryptocurrencies. Cryptocurrency investors have been talking about this – because in order to back their funds, the company issuing the ETF would have to buy a corresponding amount of Bitcoin.
Bitcoin’s price was little changed on today’s news. However, in the long term, Bitcoin ETFs make it easier for traditional institutional investors to enter the cryptocurrency space. For example, pension funds and insurance funds may speculate on Bitcoin prices for the first time, which would drive up demand for Bitcoin.
Currently, agents investing in cryptocurrencies have been buying shares in crypto-focused companies like Coinbase and MicroStrategy, which held more than $8 billion in Bitcoin as of January. The entry of Bitcoin ETFs could reduce the value of these companies.
