The Securities and Exchange Commission (SEC) approved 11 Bitcoin exchange-traded funds (ETFs) on Wednesday, paving the way for numerous new investors to enter the world of cryptocurrencies.
The Securities and Exchange Commission just gave the nod to 11 applications, and guess who made the cut? Big players like BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck. Here’s the twist – even though a few officials and investor advocates sounded the alarms about potential risks, the SEC still gave them the green light. Buckle up, for it’s going to be an interesting ride.
After a solid decade in the works, these ETFs are about to shake things up for Bitcoin. Now, investors can get in on the action with the world’s largest cryptocurrency without hold it directly. It’s a game-changer, giving a much-needed boost to the crypto scene that’s been dealing with its fair share of scandals. Times are changing, and Bitcoin is taking centre stage.
Talk about a roller-coaster ride for the cryptocurrency world. Amid a wild 24 hours, the Securities and Exchange Commission had the crypto community on the edge. A tweet from the SEC’s account on Tuesday had everyone cheering for the long-awaited ETF approvals, causing Bitcoin’s price to shoot up by over $1,000. Plot twist: the SEC later claimed their account was “compromised,” and the tweet was “unauthorized.”
Fast-forward to Wednesday, and surprise! The SEC gave the current green light for the ETFs, but not without adding a dash of skepticism about cryptocurrencies.
What has the SEC said?
Even though the SEC gave the nod to the new ETFs, they want everyone to know they’re not throwing a party for cryptocurrencies. The decision doesn’t mean they suddenly approve or endorse Bitcoin, according to Gary Gensler, the agency’s chairperson.
Gensler had a word of caution for investors: “Stay on your toes because there are plenty of risks tied to Bitcoin and crypto-related products.” Meanwhile, some commissioners were raising eyebrows about the SEC greenlighting these funds.
Either, Commissioner Caroline Crenshaw didn’t mince words, expressing her concern: “I worry that these products might flood the markets and end up in the retirement accounts of everyday folks who really can’t afford to lose their hard-earned savings to the potential fraud and manipulation we often see in the Bitcoin markets.”
Obviously, it appears not everyone at the SEC is popping the champagne over this decision.
What Does This Mean for the Price of Bitcoin?
It’s been a rocky couple of years for the crypto world, with Bitcoin prices taking a nosedive and a few crypto firms calling it quits. But guess what? Wednesday’s announcement brought a breath of fresh air for many investors in the crypto market.
Regulators finally gave the long-expected green light, and it’s been on everyone’s radar for months. Bitcoin’s price has been on a roller-coaster, surging about 70% since October last year. Why? Well, crypto enthusiasts were betting big on the widespread use of Bitcoin ETFs, thinking it would amp up the demand for the cryptocurrency.
Just to give you a glimpse of the journey, Bitcoin hit a low of $16,000 (£12,540) in November 2022 after the FTX crypto exchange went belly up. Fast-forward to the hours after the SEC’s announcement, and it was proudly trading at $46,500 (£36,470), quite a comeback.
So, the buzz is that Standard Chartered analysts predict these ETFs might pull in a whopping $50 billion (£39 billion) to $100 billion (£78 billion) this year alone. On the flip side, some other experts are a bit more conservative, thinking it’ll be more like $55 billion over the next five years.
As of Wednesday, Bitcoin’s market cap was dancing around a cool $913 billion (£716 billion), according to CoinGecko. Meanwhile, looking at the bigger picture, US ETFs collectively held a massive $6.5 trillion (£5.1 trillion) in total net assets as of December 2022, according to the Investment Company Institute. Talk about big numbers in the finance playground.
Image Source: Wall Street Journal
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
