The American financial markets watchdog, the SEC, gave the green light on Wednesday January 10 to the listing of a new investment product in bitcoins, a decision considered as a major step for the adoption of cryptocurrencies, which could shake up the sector.
The product authorized on Wednesday is an ETF (Exchange traded fund), an index fund that allows investors to benefit from developments in bitcoin without directly investing their money in the digital currency.
Concretely, they buy shares of the fund, which they can resell at any time, and not bitcoin, the value of their assets remaining expressed in dollars. The fund’s assets are placed in cryptocurrencies.
Launched in the early 1990s, ETFs took off in the early 2000s, attracting with their simplicity, which offers the possibility of tracking the performance of gold, oil, a stock index or an industrial sector. According to a report from Oliver Wyman, some $6.7 trillion was housed in ETFs at the end of 2022.
On Wednesday, the SEC gave authorization to 11 different companies to launch their own products, including major Wall Street houses like Fidelity and BlackRock, according to the document published on the regulator’s website.
The news caused bitcoin to rise but in measured proportions, the star cryptocurrency having already climbed significantly in recent weeks. The market had already reached a milestone, in October 2021, with the listing of the first ETF invested not directly in bitcoins but in futures contracts linked to the cryptocurrency. Until now, access to digital currencies required opening an account on a cryptocurrency exchange platform and converting a traditional currency (issued by a central bank), such as the dollar.
“A turning point”
The arrival of an ETF is “a turning point for digital assets and signals a move towards mainstream adoption and (their) legitimacy”commented Thomas Tang, vice president of private equity firm Ryze Labs. “By their mere existence within a regulated framework, bitcoin ETFs will give institutional credibility to digital assets”he added.
Many leading financiers and big bosses have publicly expressed their skepticism, even their opposition to these digital currencies in recent years. “The only true use”cryptocurrencies, is that they benefit “to criminals, to drug traffickers”For “money laundering, tax fraud”declared, in early December, the CEO of the largest bank in the world, JPMorgan Chase, Jamie Dimon. “If I were the government, I would put an end to it. »
On Wednesday, Gary Gensler argued against metal-backed ETFs, “which have consumers and are used in industry”to these new bitcoin products, which “is above all a speculative and volatile asset, which is also used for illicit activities”.