US Securities regulator approved the first exchange traded funds that track bitcoin last night, a momentous event for the crypto industry and the world’s biggest cryptocurrency.
The Securities and Exchange Commission has approved applications from BlackRock Investments, Ark Investments 21Shares Fidelity Invesco and VanEck among others. Some products will begin trading today.
Standard Chartered analysts stated that the ETFs may attract $50 billion to 100 billion in this year alone. This could drive the price of Bitcoin as high as $100,000. Some analysts believe that the inflows could be as high as $55 billion within five years.
After the SEC cleared bitcoin, its price rose by more than 2 percent to $47136.80.
Andrew Bond, managing Director and Senior Fintech Analyst at Rosenblatt Securities said: “It is a big positive for the institutionalisation of bitcoin as a class of asset.” The ETF approval will legitimize bitcoin further.
Analysts noted that the market had already priced in news of the approval. Bitcoin was up more than 70% in recent months due to the growing expectation of an ETF. It reached its highest level in March 2022 during the first week of this week.
The SEC has made a complete U-turn after rejecting bitcoin ETFs for over a decade due to concerns that they could be easily manipulable.
The price of bitcoin soared on Tuesday after a fake tweet was posted by the SEC/X claiming that the SEC had approved an exchange-traded spot bitcoin fund.