The U.S. Securities and Exchange Commission (SEC) granted approval for the creation of Bitcoin (BTC-USD) ETFs (exchange-traded funds) in the U.S. Multiple Bitcoin ETFs will be available for trading starting today, giving investors another way to invest in the world’s leading cryptocurrency.
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The long-awaited decision comes after the SEC rejected more than 20 exchange rule filings for spot Bitcoin ETPs since 2018, including the conversion of the Grayscale Bitcoin Trust into an ETP (exchange-traded product). However, SEC Chairman Gary Gensler said that the U.S. Court of Appeals for the District of Columbia determined that the SEC’s rationale for rejecting the proposed listing and trading of Grayscale’s ETF was insufficiently explained. Consequently, it paved the way for the approval of Bitcoin ETFs.
The SEC’s green light signifies a transformation of the Grayscale Bitcoin Trust into an ETF. Further, it sets the stage for various companies such as BlackRock (NYSE:BLK), Fidelity, VanEck, and many others to introduce competing products. In addition, financial giants like Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM) could serve as authorized participants (AP) for these ETFs.
Is It Good to Invest in Bitcoin Now?
The SEC’s approval is a positive development that should boost Bitcoin’s value. The move will provide retail investors access to the cryptocurrency without the necessity of direct ownership, thereby increasing its adoption.
However, Bitcoin has already experienced significant growth of approximately 165% in one year and nearly 71% in the past three months. Furthermore, Bitcoin predominantly remains a speculative and volatile asset, requiring investors to be risk-tolerant and adept at managing substantial price fluctuations.
