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Game Changer: US regulators have formally granted approval for exchange-traded funds (ETFs) directly investing in Bitcoin

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the staff of the Ridgewood blog

Ridgewood NJ, after years of delay and unclear guidance , US regulators have formally granted approval for exchange-traded funds (ETFs) directly investing in Bitcoin, marking a significant development for the approximately $1.7 trillion digital-asset sector. The Securities and Exchange Commission (SEC) greenlit 11 funds to commence trading on Thursday. Well before the official announcement, amid the aftermath of Tuesday’s SEC social media account hack, competition among potential Bitcoin ETF issuers had already escalated. In a bid to enhance product attractiveness to investors, companies were cutting prices, with BlackRock reducing the fee on its iShares ETF by five basis points to 0.25% and adjusting its introductory offer on the fund. Bloomberg Intelligence analyst Eric Balchunas noted, “BlackRock is really going for the jugular here,” as companies vie for a competitive edge.

While the regulatory approval of a Bitcoin ETF is not traditionally considered a high-profile event, the game changing moment  and current hype resembles meme levels, with crypto prices surging, hackers mobilizing, and Redditors actively promoting. However, some, including Bloomberg Opinion’s Lionel Laurent, caution against excessive optimism, suggesting that the hype around game-changing adoption akin to gold might be a stretch.

Mohamed A. El-Erian said on X , “Advocates are right in calling this a “game changer” for #crypto as a financial asset/investment, though not as a potential global currency. This #SEC decision will do more than deepen and broaden participation in #Bitcoin #investing. It will also help in countering legitimacy concerns fueled by the well-publicized scandals of the last few years, and it will provide comforting cover to some other regulators. As notable as all these factors are for anchoring crypto in the #investment world, they do not significantly propel its role as a potential global #currency. The outlook here remains more constrained.”


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