Updated January 10, 2024, 4:54 PM EST
Top line
The Securities and Exchange Commission announced Wednesday that it is greenlighting the first spot bitcoin exchange-traded funds (ETF) in the U.S., a historic step for investors seeking exposure to the world’s largest digital asset.
The SEC has approved the first spot bitcoin ETFs.
Copyright 2014 AP. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Key facts
Regulators have approved all 11 outstanding applications for spot bitcoin ETFs, from firms including BlackRock, Grayscale and Fidelity, to begin trading as soon as Thursday.
The SEC’s approval was widely expected to come on Wednesday, which was the deadline for the ETF application from Cathie Wood-led Ark Invest, the first of the applications set for a decision.
Bitcoin prices were largely flat after the announcement, trading near a two-year high of around $46,000 as institutional funds open the door to easier access to bitcoin investments for many investors.
The decision “marks a significant step towards the institutionalization of cryptocurrency, expanding bitcoin’s accessibility to a wider audience in a more regulated and simpler way,” Yiannis Giokas, senior director at Moody’s Analytics, said in e- post comment explained.
The announcement came after several hoaxes, as the SEC’s X social media account mistakenly announced a blanket approval Tuesday afternoon following a breach, the Chicago Board Options Exchange began early Wednesday afternoon by saying trading would begin this week for the funds and the SEC’s website crashed shortly before 4 p.m., after some users accessed the announcement.
Important quote
“While we approved the listing and trading of certain spot bitcoin ETP shares today, we have not approved or endorsed bitcoin. Investors should remain cautious about the many risks associated with bitcoin and products whose value is tied to crypto,” SEC Chairman Gary Gensler wrote in a statement Wednesday.
Key background
Spot bitcoin ETFs allow investors to invest in bitcoin without paying the higher fees associated with buying the token directly on dedicated crypto exchanges such as Coinbase (“spot” refers to the funds that trade the current price of bitcoin directly follows, as opposed to prices implied by futures contracts) . Gensler, long a skeptic of the crypto industry, warned this week of the “significant risk” associated with investments in digital assets. Bitcoin has surged in price as hype has built over the increasing likelihood of the ETFs’ approval, jumping nearly 200% since the start of last year, though bitcoin remains about 30% below its peak reached during the 2021 boom. The institutional backing of the bitcoin ETFs, and regulators’ subsequent blessing, comes as a vote of confidence for an industry battered by a series of bankruptcies and arrests of bad actors previously considered the face of crypto, including FTX’s Sam Bankman-Fried and Binance’s. Changpeng Zhao, the former CEOs of what were the world’s largest crypto exchanges.
Surprising fact
Publicly traded stocks linked to crypto-focused companies sank in 2024 as investor access to bitcoin exposure grew. Shares of Coinbase and bitcoin hoarder MicroStrategy each fell more than 15% in the new year, while shares of bitcoin miners Marathon Digital and Riot Platforms each fell more than 5%. Each of the four stocks has risen more than 150% in the past 12 months amid the crypto sector’s good vibes.
Big Number
Almost $900 billion. This is the total market capitalization of bitcoin, about 10% higher than the valuation of Berkshire Hathaway, the US’s seventh largest public company.
Further reading
Follow me further Twitter. Send me a safe tip.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
UnCirculars – Cutting through the noise, delivering unbiased crypto news
