The Securities and Exchange Commission’s (SEC) approved 11 spot bitcoin ETF’s for trading in the US. This comes after massive gains of the crypto currency. This decision makes buying bitcoin a lot easier for mainstream investors as well. After that decision the crypto currency dropped again though.
What the approved ETF’s mean for the regular investor
With the approval of the SEC everyone will be able to buy ETF’s from companies like BlackRock with bitcoins. They are called spot bitcoin ETF’s. People that are bullish towards bitcoin hope that this will extend the amazing run the coin had since last October. Some Experts expect growth because everyone can buy bitcoin now in one way or another and there are no regulations anymore. This spreads hope that more and more people might get into the cryptocurrency.
What happened?
The SEC is regulating financial markets for the government. Moreover they said in a statement on Wednesday that it would approve 11 spot bitcoin ETF’s. Management companies like BlackRock, Fidelity, crypto-investment firm Grayscale, and ARK Invest will sell these.
In the past speculations about this move lead to a massive growth of bitcoin. The cryptocurrency climbed about 70% to a high of more than $48.000. The coin experienced a fall after that though so it is down from that high a little bit at the moment. The SEC’s chairman, Gary Gensler, said in another statement on Wednesday though, that he is still skeptical towards cryptocurrencies. He called them “primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing:”
Everything you need to know about the approved spot bitcoin ETF
The approved ETF’s main purpose is to make bitcoin accessible for everyone without having to store it. These ETF’s are like a basket of securities that sell on stock exchanges. With the ETF you get a straightforward route into the asset and you won’t have to hold it directly. You can buy assets and check their price at any time you want but you don’t actually own a bitcoin. You have to store these bitcoins(if owned) somewhere digitally. With the ETF’s it is a way to invest into the coin just like into any other stock. This is easier for investors and more comfortable. This is because investors did not feel comfortable investing into unregulated assets before. These approvals change chat situations now.
The crypto market reacts to regulators approval
Different analysts predict growth for the cryptocurrency following the SEC’s approval. Fundstrat’s Tom Lee predicted that spot ETF’s will lift bitcoin up to $150.000 within 12 months. Standard Chartered anticipated the cryptocurrency to surge over 300% and with that hitting $200.000 by the end of 2025.
In 2023 bitcoin outperformed a the majority of the stock market. It grew more than the S&P 500 and the “Magnificent Seven” group of mega cap tech stocks of that year.
These approvals are a big step towards making cryptocurrency more acceptable for the population. Maybe this is a first step to implement these cryptocurrencies into the payments of our everyday life. It could also be of use as an investment for everyone and it might be more appealing to invest into bitcoin than before.
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