After a hilarious fake out yesterday, the US Securities and Exchange Commission (SEC) *officially* approved 11 Bitcoin ETFs, giving the crypto world a bit win to start the new year. The ETFs will make it easier for normal, non-web3 people to invest in the cryptocurrency, opening up the opportunity for broader interest in the digital asset. It is presumed the decision will spur further interest in crypto.
On Wednesday, in a process that was thoroughly confusing and appropriately ass-backward, the SEC uploaded a document to its website announcing the approval of the first spot Bitcoin ETFs. However, the agency then inexplicably deleted the document, making it impossible for most media outlets to verify its decision. A few journalists and crypto stans took screenshots and videos of the document before it disappeared, publishing them to X to prove that the government had approved the funds. A statement from the SEC reported by Reuters confirmed that the ETFs had been approved.
The financial and crypto communities have been on pins and needles for weeks waiting for the SEC to deliver its verdict. Many expected that the government would approve the ETF applications—largely because a bevy of major financial firms, including Fidelity and Blackrock, have filed to launch them. Now that the government has officially endorsed the funds, it is expected that there will be much competition to draw in investors.
The journey through that approval process presented many interesting bumps in the road. In addition to Wednesday’s weird document flub, the approval process was temporarily derailed Tuesday when the SEC’s X account was hacked, allowing an unknown cybercriminal to post a bogus tweet that claimed (prematurely) that the ETFs had been approved. The fake tweet sent the price of Bitcoin on a minor rollercoaster ride and led to conspiratorial accusations by the crypto community—many of whom claimed they were victims of a government plot. The SEC and X now say they are both investigating the incident to try to understand what happened.
So, what is an ETF? For those not accustomed to arcane financial terminology (I count myself in that category), you should know that the acronym stands for exchange-traded fund, which usually refers to a bucket of stocks to invest in instead of an individual stock.
The spot Bitcoin ETFs approved by the SEC will actually hold onto the cryptocurrency rather than stocks and for the price the crypto was acquired at. This means the price of the ETF will move with the flow of the price of Bitcoin.
In short: Spot ETFs will allow everyday people to invest in Bitcoin more easily through their normal brokerage accounts instead of having to do so through the admittedly convoluted processes associated with crypto culture. It will make Bitcoin much more like a normal stock and thus, much more accessible to the vast majority of people.
Now, a day or so after the bogus ETF approval, the government has officially approved the ETFs—for real, this time. There was much rejoicing online Wednesday, as crypto acolytes celebrated the landmark regulatory move, however, the price of Bitcoin ended up dropping to just over $US45,200.