Bitcoin ETFs get greenlight from top federal regulator, after years of resistance. The fund will track the price of the cryptocurrency.
Bitcoin is on a tear. In the past year, the top cryptocurrency has gained more than 150%.
The massive run-up has come despite months of negative headlines, the successful prosecution of one of the biggest players in crypto, and after financial regulators and law enforcement targeted a long list of investors and promoters, executives and companies.
Now, crypto is getting a big boost. On Wednesday, Wall Street’s top cop, the Securities and Exchange Commission (SEC), approved a bitcoin ETF, an investment fund that will track bitcoin prices, and will pave the way for more of the public to buy it.
Steven McClurg, the co-founder of Valkyrie Investments, which successfully applied for a bitcoin spot ETF, says the SEC’s decision will widen the appeal of cryptocurrencies.
„It gives them the opportunity and ability to invest in bitcoin through a regulated, structured security,“ he said. His Valkyrie Bitcoin Fund was one of several applications the SEC approved.ETFs are less costly than mutual funds
ETFs, or exchange-traded funds, have become extremely popular with regular investors. These funds usually track the prices of stocks and bonds and trade on exchanges. That makes them easy to buy, and they’re less costly than mutual funds. Today, ETFs are a $7.7 trillion industry.
In recent years, sites like Coinbase and Kraken have made it easier for people to buy and sell bitcoin and other cryptocurrencies. But according to McClurg, there are still big barriers to entry.
„In the case of bitcoin, it’s difficult for some people to learn how to buy it and store it on their own,“ McClurg says. „A lot of people are still uncomfortable with the technology, and want to have the ability to invest in it. And the best way to do that is really through an ETF.“No need for a „private key“ to cryptos
According to Bryan Armour, director of passive strategies research for North America at Morningstar, these new funds are going to be seen as a safer way to buy and sell cryptocurrencies.
„There’s no signing up with a crypto exchange, managing a wallet, God forbid losing your private key to whatever bitcoin you own,“ he says. „It certainly will get bitcoin into more people’s hands.
