SEC approves Bitcoin ETF, marking historic day for cryptocurrency

With the tacit U.S. acceptance of a bitcoin exchange-traded fund, cryptocurrency trading is finally coming up to the masses after years of trial and error by would-be fund providers.

On Friday, the U.S. Securities and Exchange Commission approved bitcoin futures ETFs, a first for the market, following a meeting of the regulator’s five commissioners.

ProShares, which applied for its Bitcoin Strategy ETF this summer, could be the first to begin trading next week.

On Oct. 15, the company filed a post-effective modified prospectus, claiming that the fund will begin trading on Monday, October 18. However, the fund may not begin trading immediately.

Readily accessible to all

Proponents of a bitcoin ETF claim that by providing investors with a regulated alternative to the underlying digital asset, the product will be more readily accessible for those interested in bitcoin than the actual cryptocurrency.

The first product, on the other hand, will follow bitcoin futures rather than the price of bitcoin itself. Due to the laws under which futures-based products operate, SEC Chair Gary Gensler believes they may provide superior investor protections.

The SEC has previously expressly rejected bitcoin ETF proposals, but it is not required to formally give the green light on one.

The SEC can simply allow an application to become effective rather than making a public notification under federal law.

The form, according to ETFStore President Nate Geraci, is “a step forward” for digital assets in terms of integrating them with the traditional financial industry.

The future of crypto is bright

He said the SEC permission is confirmed by the filing of a post-effective amendment.

“Seeing SEC Chairman Gensler feel comfortable with enabling mainstream investors more access to bitcoin is a positive indication for the future of crypto,” he said in quotes by CoinDesk.

A bitcoin ETF has long been sought by industry participants, with Gemini founders Cameron and Tyler Winklevoss originally requesting one in 2013.

The SEC has denied every previous application and has failed to make a decision on more than 30 more applications currently pending.

“The existence of a bitcoin ETF will now draw more investors into the crypto space and promote more education,” Geraci said.

 

Image courtesy of Cointelegraph News/YouTube

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