US SEC approves bitcoin ETFs in boost for crypto market

Washington — The US securities regulator on Wednesday approved the first US-listed exchange traded funds (ETFs) to track bitcoin, its chair Gary Gensler said, in a watershed for the world’s largest cryptocurrency and the broader crypto industry.

The agency approved applications, including from BlackRock , Ark Investments and 21Shares, Fidelity, Invesco, and VanEck, among others, according to a notice on its website. Some products are expected to begin trading as early as Thursday.

The products — a decade in the making — would be a game-changer for bitcoin, offering institutional and retail investors exposure to the world’s largest cryptocurrency without directly holding it, and a major boost for a crypto industry beset by a string of scandals.

Standard Chartered analysts this week said the ETFs could draw $50bn to $100bn this year alone, driving the price of bitcoin as high as $100,000. Other analysts have said inflows will be closer to $55bn over five years.

“It’s a huge positive for the institutionalisation of bitcoin as an asset class,” said Andrew Bond, MD and senior fintech analyst at Rosenblatt Securities. “The ETF approval will further legitimise bitcoin.”

Bitcoin has gained more than 70% in recent months on the expectation ETFs for the asset would be approved.

A green light marks a U-turn for the SEC, which for a decade rejected bitcoin ETFs due to worries they could be easily manipulated.

Hopes the SEC would finally approve bitcoin ETFs surged last year after a federal appeals court ruled that the agency was wrong to reject an application from Grayscale Investments to convert its existing Grayscale Bitcoin Trust (GBTC) into an ETF. That ruling forced the agency to re-examine its position.

In a statement, SEC chair Gensler said that, in light of the court ruling, approving the products was “the most sustainable path forward”, but added the agency did not endorse bitcoin, which is risky and volatile.