The Securities and Exchange Commission on Wednesday approved rule changes to allow the creation of bitcoin exchange-traded funds in the U.S., a long-awaited move that will give regular investors access to the controversial and volatile cryptocurrency.
The decision will likely lead to the conversion of the Grayscale Bitcoin Trust, which holds about $29 billion of the cryptocurrency, into an ETF, as well as the launch of competing funds from mainstream issuers like BlackRock’s iShares and Fidelity. The first funds are poised to begin trading on Thursday.
The approval may prove to be a landmark event in the adoption of cryptocurrency by mainstream finance, as the ETF structure gives institutions and financial advisors a familiar and regulated way to buy exposure to bitcoin.
“We think that the SEC approval, should we and others get it, is a green light for institutions. We’ve been talking to quite a few of them, and they’re much more interested now that the SEC effectively is paving the way,” Ark Invest CEO Cathie Wood said on CNBC’s “Halftime Report” on Monday. Ark Invest has partnered with 21Shares on a proposed bitcoin fund.
The decision comes after an official SEC social media account on Tuesday falsely said that bitcoin ETFs had been approved. The SEC said the account had been compromised.
The regulator has for years opposed a so-called spot bitcoin fund, with several firms filing and then withdrawing applications for ETFs in the past. SEC Chair Gary Gensler has been an outspoken critic of crypto during his tenure.
However, the regulator appeared to change course on the ETF question in 2023, possibly due in part to an August loss to Grayscale in a court decision which criticized the SEC for blocking bitcoin ETFs while allowing funds that track bitcoin futures.
“Importantly, today’s Commission action is cabined to ETPs holding one non-security commodity, bitcoin. It should in no way signal the Commission’s willingness to approve listing standards for crypto asset…
Read the full article here