The SEC has approved 11 ETFs for bitcoin in the US, allowing new investors to invest without buying bitcoin directly. ETFs are easy to trade and can be traded on stock exchanges. This development is a win for fund managers like BlackRock, Fidelity Investments, and Invesco, who have pushed for approval. Some products are expected to begin trading as early as Thursday, launching a fierce competition for market share.
The SEC has approved new ETFs, but remains sceptical about cryptocurrencies and bitcoin. Chairman Gary Gensler warns investors to remain cautious. Other commissioners express alarm about the potential flood of products in US retirement accounts, fearing fraud and manipulation in spot bitcoin markets.
Bitcoin's price has risen by about 70% since October due to the widespread use of ETFs, which investors believe will boost demand for the cryptocurrency. The SEC's greenlight has been anticipated for months, and the price has risen to $46,500 in the hours after the announcement. Analysts predict that ETFs could draw $50bn to $100bn this year alone, potentially driving the price of bitcoin as high as $100,000.
However, most remain concerned that the broad use of crypto ETFs could put too much risk and volatility into Americans' retirement accounts, as the price of bitcoin is known to fluctuate wildly. The price of Ethereum has also risen on speculation that fund managers will create ETFs around it.