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The US regulator has approved exchange-traded funds (RTFs) that invest directly in Bitcoin. Experts are calling it a landmark movement in the US financial market that will broaden access to the largest cryptocurrency on Wall Street and beyond. A green light marks a U-turn for the Securities and Exchange Commission (SEC), which for a decade rejected bitcoin ETFs due to worries they could be easily manipulated.
The US SEC approved 11 applications, including from BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck, among others, according to a notice on its website. Some products are expected to begin trading as early as Thursday.
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As per the experts the move could be a game-changer for bitcoin, offering institutional and retail investors exposure to the world’s largest cryptocurrency without directly holding it, and a major boost for a crypto industry beset by a string of scandals.
What are spot-bitcoin ETFs and why are they driving bitcoin prices upward?
According to Standard Chartered analysts, ETFs could draw $50 billion to $100 billion this year alone, potentially driving the price of Bitcoin as high as $100,000.
Bitcoin was last up 3% at $47,300. The cryptocurrency has soared more than 70% in recent months on anticipation of an ETF, and hit its highest level since March 2022 earlier in the week.
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The landmark decision comes after Grayscale Investments won a key victory over the SEC. A federal appeals court had overturned the rejection of Grayscale’s application to convert its Bitcoin trust into an ETF. The court called the denial “arbitrary and capricious” because the commission failed to explain its different treatment of similar products. ETFs that hold Bitcoin futures were approved in 2021.
The SEC’s loss to Grayscale was one of the reasons why the SEC approved the applications, Chair Gary Gensler said.
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“Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot Bitcoin ETP shares,” Gensler said.
Crypto proponents have for years argued that a so-called spot fund that invests directly in Bitcoin would be beneficial to investors and would help bring the industry closer to the more highly regulated world of traditional finance.
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