Bitcoin ETFs Win SEC Approval

  • January 12, 2024
  • Jennifer Moore
Bitcoin ETFs Win SEC Approval

Bitcoin ETFs are making headlines as the Securities and Exchange Commission finally approved it on Wednesday 10th January 2024. The move is going to benefit ten major ETFs such as Invesco, Ark Invest, BlackRock, Fidelity, and Grayscale. The approval will be a paradigm shift for the cryptocurrency market because investors will now be able to gain exposure to Bitcoin through financial instruments. 

Basic Facts About Bitcoin ETF

ETF or Exchange Traded Fund is a type of investment fund that monitors the performance of an underlying asset. This includes currencies, and precious metals like gold, silver, and Bitcoin. Investors can gain exposure to the asset’s value without owning it at all. These ETF exchange traded funds imitate the price movements of Bitcoin. Many ETFs use future contracts to fulfill goals. Moreover, these funds got recognition partly because the SEC till last year blocked the creation of ETFs that hold Bitcoin. 

SEC Approval is Good News For Bitcoin

In 2023, Bitcoin’s prices were surging for a fairly long period. The prices hovered around $40K because the anticipation of the US SEC generated a lot of enthusiasm in the crypto market. The positivity surrounding this approval is likely to expand because of the following consequences. 

Better Convenience and Accessibility

The spot Bitcoin ETF makes it easier for retail investors to gain more accessibility to Bitcoin. It will benefit them because they will gain primary knowledge of Bitcoin regarding wallet management and better private key security. Moreover, the acceptability of Bitcoin ETFs will be more familiar and user-friendly.

Mainstream acceptance

The approval of spot Bitcoin ETF will attract many potential investors, including those belonging to large institutions. They may invest directly in the cryptocurrency markets for regulatory frameworks. Moreover, many will adopt it as an investment asset. 

The crypto market’s maturity levels will increase

The approval of spot bitcoin ETF clearly indicates that the crypto market’s maturity levels have increased considerably. Therefore, it may mature to a point when it may support standard investment products after getting regulatory support. 

Goals of Bitcoin ETF

Bitcoin ETFs after approval have a plan to expand in the crypto market. It will allow more people to invest in Bitcoin without directly investing in the cryptocurrency. Therefore, people will get a lot of relief from the additional charges and obstacles of buying them directly. The need for excess funds and elaborate security processes will be reduced considerably by having a familiar investment type. 

Make Bitcoin More Affordable

The high rates of Bitcoin essentially imply that retail investors cannot purchase Bitcoins directly. But now that will change for the better. This is because the ETF will permit more exposure to BTC within the budgetary requirements of retail investors. Therefore, it will not be an exaggeration to predict that this move may diversify investment goals and increase risk tolerance. 

Improve Security Features

Before SEC approval, it was almost mandatory to either have a wallet or have security keys to protect one’s Bitcoin. For instance, if one buys cryptocurrencies through exchange, then one needs to select the keys stored on that exchange. The other method of protecting it is to have either a hot wallet that works online or a cold wallet that works offline. Although many crypto investors and users currently rely on wallets and security keys, none are 100% foolproof as far as security is concerned. In this regard, ETFs are a big advantage because it does not require ownership of cryptocurrency or storage of keys. 

Easily Comprehensible

Bitcoin ETFs are easily comprehensible and many commoners will understand it better. Therefore, if any investor is interested in an ETF then one can concentrate on asset trading. Such investors do not need to learn about key storage, decentralized exchanges, cryptocurrencies, blockchain technology, and crypto mining. 

Also Read- PayBitoPro Records Registration of 100+ Crypto Brokers in First Week of 2024

In Conclusion

The approval of Bitcoin ETFs will permanently change the landscape of cryptocurrencies. A large number of investors who could not afford Bitcoins will now be able to invest in Bitcoin. The decision is a big respite for all major asset management companies such as Invesco, Ark Invest, BlackRock, Fidelity, and Grayscale as they will be able to launch their ETFs. As far as public credibility is concerned, the impact of the decision is undoubtedly positive because ETFs can enhance security levels.

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