US Govt Approves Bitcoin Exchange-Traded Funds

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Facts

  • Bitcoin began trading exchange-traded funds (ETFs) on Thursday, one day after the Securities and Exchange Commission (SEC) approved the spot market Bitcoin ETFs.1
  • A total of 11 bitcoin-holding ETFs will be listed on the following three exchanges: NYSE Arca, Nasdaq, and the Cboe BZX Exchange.2
  • The SEC’s decision also allows asset management companies, such as Blackrock and Fidelity, to issue competing bitcoin funds. Blackrock’s application for approval this past summer potentially spurred optimism about the SEC’s ruling on Wednesday.3
  • Despite the SEC’s approval, regulatory body Chair Gary Gensler wrote in a statement that his agency 'did not approve or endorse bitcoin.' Gensler suggested that the decision was made to comply with a court ruling that struck down the SEC’s decision to disapprove the listing and trading of Grayscale’s ETF — referred to as an exchange-traded product within the SEC’s statement.4
  • On Tuesday, the SEC appeared to have announced its approval of Bitcoin ETFs in a post on X, causing the cryptocurrency's price to surge. However, Gensler later stated that the regulator's account had been hacked.5
  • Two out of the SEC’s five-member commission voted against the decision. Bitcoin traded above $47K on Tuesday. At the start of 2023, the digital asset sold at roughly $17K.6

Sources: 1Investopedia, 2Bitcoin News, 3CNBC, 4SEC.gov, 5New York Times and 6USA Today.

Narratives

  • Pro-establishment narrative, as provided by CBS. The SEC's decision to approve Bitcoin ETFs opens up the cryptocurrency to millions of investors and further legitimizes the digital asset. While there are still questions about the underlying value of cryptocurrencies, the approval shows that crypto has entered the big leagues of finance. With the backing of the world’s biggest companies, such as Blackrock and Fidelity, Bitcoin is entering the mainstream, and can now be viewed as more than just an outsider's investment.
  • Establishment-critical narrative, as provided by Coindesk. While some wealthy Bitcoin investors may be happy about the SEC's approval of Bitcoin ETFs, true crypto supporters know that this move will only lead to regulation and restriction of the financial medium by the very powers it was created to defy. Bitcoin and other examples of decentralized finance were created to avoid the oppressive thumb of big banks and Beltway regulators. At first, the powers that be tried to suppress and destroy crypto. After they failed to do so, they proceeded to infiltrate the industry and turn it into a mainstream commodity. Bitcoin ETFs traded on mainstream exchanges may be a win for some, but they go against the spirit of cryptocurrency altogether.
  • Cynical narrative, as provided by Moneyweekuk. Although Bitcoin ETFs have been approved, it's clear that the SEC still does not trust cryptocurrencies. Often the victim of fraud, hacking, and theft, those who do place their money into crypto should remain vigilant for the many bad actors that continue to take advantage of the vulnerability and volatility of investments.

Predictions