Bitcoin ETFs approved by US SEC. Here is what it means

The Securities and Exchange Commission (SEC) has approved the first US-listed exchange-traded funds (ETFs) to track Bitcoin. The approval of 11 spot Bitcoin ETFs will not only enhance accessibility for investors but also contribute to the establishment of a more robust and regulated crypto market, say experts. 

In the past, numerous scandals have unfolded, and many have lost their funds either due to compromised wallets or sudden closures of companies. However, with ETFs now listed on tightly-regulated US stock exchanges, accessibility for retail investors will be facilitated through their existing brokerage accounts. These accounts are subject to close supervision, adding an extra layer of security to the investment process.  

“An ETF will be the simplest form of Bitcoin exposure for retail users. Investors can seamlessly benefit from Bitcoin price movements without the complexities of digital wallets or drastic investment strategy overhauls. Imagine the impact if 401(k) retirement plans start investing in Bitcoin ETFs. These funds manage a staggering $6 trillion for about 60 million Americans. That influx of retail investors will familiarise crypto even further and help onboard millions of new users to crypto,” tweeted Ashish Singhal Co-founder and Group CEO at CoinSwitch and PeepalCo, a platform for wealth-tech products. 

Bitcoin is the oldest and the most popular virtual currency, has given 166% returns over the last one year. The value of the currency surged from $17,944 on January 12, 2023 to $ 46,460 on January 11, 2024. It touched all time high on November 10, 2021 at $68,789. 

“The approval of spot Bitcoin ETFs by the SEC marks a significant milestone after a decade of anticipation and regulatory challenges. The decision to greenlight 11 spot Bitcoin ETFs reflects a growing acceptance and recognition of digital assets within traditional financial markets. This move is expected to bring about increased adoption, liquidity, and overall market maturity. It also signifies a shift in the perception of cryptocurrencies from a niche asset class to one that is gaining mainstream acceptance. The fact that these ETFs are set to trade on major exchanges such as NYSE Arca, Nasdaq, and Cboe BZX Exchange adds further legitimacy to the crypto market. It opens up opportunities for a broader investor base to participate in the crypto space through familiar and established trading platforms. Investors are now closely monitoring the developments surrounding Ethereum ETF applications,” said Edul Patel, CEO of Mudrex. 

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For comparison, Gold prices quadrupled since the SPDR Gold Shares—the first US-traded gold ETF—went live in 2004. Bitcoin is also widely referred to as digital gold, and even scarcer with a capped supply of 21 million. With the growing demand for Bitcoin as a store of value, analysts predict strong potential for value appreciation in the long term, tweeted Singhal. 

Spot Bitcoin ETFs not only symbolizes a maturing market but also signifies support from regulatory authorities. This clarity is pivotal for fostering a secure and transparent environment and is essential for the sustained growth of the crypto ecosystem,” said Rahul Pagidipati, CEO, ZebPay.