Key Takeaways
- • The SEC authorized 11 applications to offer spot Bitcoin exchange-traded funds on January 10, 2024, a landmark approval for the crypto industry according to The New York Times.
- • BlackRock and Fidelity were among the large asset managers approved to offer the products, which could begin trading as soon as Thursday on platforms such as Nasdaq.
- • Bitcoin's price rose more than 60 percent since the fall of 2023, as traders anticipated regulatory legitimacy and new investment from professional wealth managers and retail traders.
- • SEC Chair Gary Gensler stated that the approvals were not an endorsement of Bitcoin and cautioned investors about the risks associated with crypto-linked products.
- • Bitcoin's price spiked Tuesday after a hacked SEC X account posted a false approval notice, then fell before the official regulatory filing on Wednesday confirmed the approvals.
Summary
Federal regulators on Wednesday, January 10, 2024, approved a new financial product tracking the price of Bitcoin, according to The New York Times. The Securities and Exchange Commission authorized 11 applications to offer exchange-traded funds tied to Bitcoin, giving investors a potentially simpler way to gain exposure to digital assets. Major asset managers including BlackRock and Fidelity were among the approved issuers, and the products could begin trading as soon as Thursday on traditional exchanges such as Nasdaq.
The approvals were presented by proponents as a sign that mainstream financial institutions remain willing to deal in digital currencies despite roughly 18 months of market crashes and high-profile bankruptcies. Bitcoin's price had risen more than 60 percent since the fall, as traders bet that regulatory approval would lend the industry legitimacy and attract fresh investment from professional wealth managers and amateur traders.
The market's reaction was volatile. Bitcoin's price rose on Tuesday after a post appeared on the SEC's official X account announcing the ETF approvals, but fell quickly when SEC Chair Gary Gensler said the agency's account had been hacked. The formal approvals were then issued in a regulatory filing on Wednesday, and Bitcoin's price rose slightly following the announcement.
In a statement, Gensler, a prominent critic of fraud and volatility in crypto markets, said the approvals should not be construed as an endorsement of the technology. "We did not approve or endorse Bitcoin," he said, adding that "investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto."
The approvals were presented by proponents as a sign that mainstream financial institutions remain willing to deal in digital currencies despite roughly 18 months of market crashes and high-profile bankruptcies. Bitcoin's price had risen more than 60 percent since the fall, as traders bet that regulatory approval would lend the industry legitimacy and attract fresh investment from professional wealth managers and amateur traders.
The market's reaction was volatile. Bitcoin's price rose on Tuesday after a post appeared on the SEC's official X account announcing the ETF approvals, but fell quickly when SEC Chair Gary Gensler said the agency's account had been hacked. The formal approvals were then issued in a regulatory filing on Wednesday, and Bitcoin's price rose slightly following the announcement.
In a statement, Gensler, a prominent critic of fraud and volatility in crypto markets, said the approvals should not be construed as an endorsement of the technology. "We did not approve or endorse Bitcoin," he said, adding that "investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto."
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