The Securities and Exchange Commission (SEC) approved the first sale and distribution of 11 exchange-traded Bitcoin (BTC) exchange-traded funds (ETFs) that will track the daily price of the asset. The decision (which was passed by a 3-2 vote) marks a milestone in the cryptocurrency market, as investors and retailers are authorized to access the digital currency indirectly.
The measure moved the asset’s value by more than 8%. The SEC approved applications from ARK, Grayscale, Bitwise, Hashdex, Invesco Galaxy, VanEck, WisdomTree, Fidelity, and Franklin Templeton and more applicants. Despite the authorization, SEC Chairman Gary Gensler warned that they do not "endorse bitcoin":
While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.
SEC.gov Statement on the Approval of Spot Bitcoin Exchange-Traded Products by Veronica Silveri on Scribd
SEC’s X account hacked
Early this Wednesday, BTC soared to its highest level in two years ($47,914). This sudden rise occurred after a fake announcement published on the SEC’s official X account, which was hacked. The hackers had spread a message announcing that the regulator had approved the launch of the ETF.
The effect of the false announcement was imminent. BTC rose from $46,700 to almost $48,000. However, after a few minutes, another SEC post reported that the account had been "compromised" and that an "unauthorized post" had been published:
The @SECGov X account was compromised, and an unauthorized post was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
After this post, Bitcoin immediately plummeted to $45,400, until the approval was officially announced by the SEC.
What is Bitcoin ETF?
On Finect, Jose Trecet describes the BTC ETF as “an exchange-traded fund that tracks the price of Bitcoin” and states that “unlike buying Bitcoin directly, where the investor owns the cryptocurrency, An ETF would allow investors to gain exposure to its value without actually owning it. This is done through a product that can be easily bought and sold on traditional stock markets."
The SEC's decision was considered a "crucial event ... that could mark an important milestone in the history of cryptocurrencies." Javier Molina, expert in financial assets, commented to Finect:
The Bitcoin ETF is important because it changes the way we interpret Bitcoin as a long-term reserve asset or asset class. With an ETF you make it easy for anyone to enter the market, without having a wallet or having to open an account on an exchange.
