US SEC Approves Bitcoin ETFs in Watershed for Crypto Market

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The U.S. securities regulator on Wednesday approved the first U.S.-listed exchange traded funds (ETFs) to track bitcoin, in a watershed for the world's largest cryptocurrency and the broader crypto industry.

The Securities and Exchange Commission said it approved 11 applications, including from BlackRock, Ark Investments/21Shares, Fidelity, Invesco and VanEck, despite warnings from some officials and investor advocates that the products carried risks.

Most of the products are expected to begin trading Thursday, issuers said, kicking off a fierce competition for market share.

A decade in the making, the ETFs are a game-changer for bitcoin, offering investors exposure to the world's largest cryptocurrency without directly holding it.

"It's a huge positive for the institutionalization of bitcoin as an asset class," said Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities.

Standard Chartered analysts this week said the ETFs could draw $50 billion to $100 billion this year alone. Other analysts have said inflows will be closer to $55 billion over five years.

The green light marks a U-turn for the SEC, which had rejected bitcoin ETFs due to worries they could be easily manipulated. SEC Chair Gary Gensler is a fierce crypto skeptic.

In a statement on Wednesday, Gensler said that in light of the court ruling, approving the products was "the most sustainable path forward," but added the agency did not endorse bitcoin, calling it a "speculative, volatile asset" also used to fund crime.

Gensler also repeated his long-held position that bitcoin is a commodity not a security, and as such, Wednesday's approval was in "no way" a signal that the SEC would be easing up on its crackdown on crypto players it says are flouting its laws.

(Source: Reuters)