After months of waiting, the U.S. Securities and Exchange Commission (SEC) has approved the first spot Bitcoin exchange-traded fund (ETF). However, SEC Chair Gary Gensler was quick to distance himself and the SEC from the world of Bitcoin and cryptocurrencies.
In his remarks, Gensler emphasized that the approval of the ETF does not signal an endorsement of Bitcoin itself. He also warned investors to exercise caution due to the potential risks associated with Bitcoin and other cryptocurrency-related products.
This stance by the SEC highlights their approach to providing access to certain Bitcoin-related financial instruments while reminding investors to be mindful of the inherent risks in the volatile cryptocurrency market.
Cathie Wood, the founder of Ark Investment Management LLC, was taken aback by Gensler’s comments, which seemed to criticize the entire cryptocurrency space. In an interview with Bloomberg Radio, Wood described this as a typical reaction to disruptive innovation. She also noted that the established regulatory framework is clashing with the emerging landscape of digital assets, causing curiosity among individuals.
Interestingly, the SEC approved approximately a dozen spot Bitcoin ETFs, including one from Ark in collaboration with 21Shares.
This decision marks a significant shift from the SEC’s previous decade-long opposition to spot Bitcoin ETFs. Wood believes that this approval heralds a new chapter for Bitcoin, and she is optimistic about becoming one of the top providers of this Bitcoin ETF. However, she acknowledges the SEC’s cautious approach and suggests that institutions will need to navigate the new framework with increased diligence.
Following the SEC’s approval of exchange-traded funds directly investing in Bitcoin, the cryptocurrency experienced a modest ascent, briefly reaching $47,000. Traders are now closely watching these products to gauge the level of funds they attract.
