The SEC authorizes the Bitcoin ETF, but the surprise effect was already ruined yesterday
An SEC decision yesterday, Wednesday, January 10, 2024, gave the green light to the public sale of the first US exchange-traded funds holding bitcoin, as reported by the WSJ .
The Securities and Exchange Commission's decision will allow traditional investors to buy and sell bitcoin as easily as stocks and mutual funds. Expectations of US authorities approving such funds pushed the price of bitcoin to its highest level in two years. SEC The digital currency approached $47,800 late Tuesday morning, when a fake news story had already announced its approval, but it was only a hack of SEC account X.
Previously, investors who wanted to buy and sell digital currencies had to either trade on cryptocurrency exchanges and incur large transaction fees or buy products that tracked bitcoin less directly. At least half a dozen bitcoin futures ETFs are already on the market. These funds use futures contracts to provide exposure to swings in the price of bitcoin, although they have been criticized for often moving away from the price of bitcoin.
Until now, the SEC had repeatedly rejected applications for so-called spot bitcoin ETFs, deeming them vulnerable to fraud and market manipulation. SEC Chairman Gary Gensler had discouraged investor access to cryptocurrency markets until they were regulated. Now it lets Bitcoin enter the official financial market through the authorized gateway.
The green light for the new funds came one day after the hack of the SEC's official X account last Tuesday. An unauthorized post claimed that the agency had approved these funds. Bitcoin initially jumped, only to reverse its gains when the agency reported that his account had been compromised.
Prior to the hack, Gensler said on the social media platform that cryptocurrency investments can be “exceptionally risky and often volatile.” Several cryptocurrency companies have filed for bankruptcy and scammers continue to exploit the growing popularity of cryptocurrencies to lure individual investors into scams, he said.
Now the demand for BTC should increase, although not suddenly, precisely because ETFs will have to cover themselves by purchasing the virtual currency.
Asset managers such as BlackRock, Fidelity Investments, Cathie Wood's ARK Investment Management, Invesco, WisdomTree, Bitwise Asset Management and Valkyrie have applied to list the new funds, known as spot-bitcoin ETFs, because the funds buy and sell the digital currency itself .
There are now ETFs on practically every possible investment.
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The article The SEC authorizes the Bitcoin ETF, but the surprise effect had already been ruined yesterday comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-sec-autorizza-letf-su-bitcoin-ma-leffetto-sorpresa-era-gia-stato-rovinato-ieri/ on Thu, 11 Jan 2024 06:15:09 +0000.