Fintechs have broadly welcomed the long-awaited decision by regulators to approve the first US-listed ETFs to track bitcoin, seen as a landmark moment for the crypto industry.
The Securities and Exchange Commission yesterday said it had green-lighted all 11 applications from spot bitcoin ETF issuers including from finance heavyweights Fidelity and BlackRock.
But US regulators also warned about the risks linked with the asset.
SEC chairman Gary Gensler said:
"Bitcoin is primarily a speculative, volatile asset that's also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.
"Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto."
The approval of the ETFs, which can be purchased by retail and other investors, means crypto will open up to new investors who might previously have been circumspect about buying bitcoin.
It will also mean that tens of billions of dollars will likely flood into the crypto market, as Fidelity, Blackrock, Invesco and others buy bitcoin.
According to CoinGerko, the market capitalisation of bitcoin was valued at more than $913 billion yesterday.
Most of the ETFs, which are traded on exchanges like shares, are expected to begin trading today, as they fight it out for market share.
The approval is a boon for the under-the-fire crypto industry, as it follows recent turmoil in the market which has seen the price of bitcoin fall and the high-profile collapses of several crypto firms.
"It is pretty unprecedented, so we'll see how it works," Steven McClurg, chief investment officer at Valkyrie, whose ETF was among those approved, told Reuters.
Also speaking to Reuters, Cynthia Lo Bessette, head of digital asset management at Fidelity, said the approved ETFs should provide "increased choice for investors who want to engage with" crypto.
Vlad Tenev, the CEO of digital trading app Robinhood, tweeted:
“As a pioneer in offering spot crypto trading, Robinhood is thrilled about the SEC’s decision to approve spot Bitcoin ETFs.
“We've been ahead of the curve in crypto access, and we plan to list these ETFs on Robinhood as soon as possible.
“This milestone enhances the integration of cryptocurrencies with traditional finance. It not only offers clarity but also opens avenues for sophisticated risk management tools that benefit our customers in managing their digital asset investments.”
Lukas Enzersdorfer-Konrad, deputy CEO, Bitpanda, the crypto firm, said:
"As with any major financial event we will likely see some short-term price fluctuations as people try to capitalise on the news.
“Ultimately, the short-term fluctuations don’t matter. In the long term, these new ETFs from established financial firms will bring new investors to the digital assets space, both retail and institutional.
“They will provide stability and confidence, and are yet another step towards crypto being treated like any other asset class."
Uldis Tēraudkalns, CEO of Nexpay, the payments firm, said:
“In combination with the adoption of MiCA in Europe, an SEC-approved Bitcoin spot ETF will be a very strong signal for legitimising Bitcoin and at least parts of the crypto industry.
“You can see already now and will see even more traditional finance players enter the space and open up the industry for more and more consumers and investors.
“Due to massive access to capital for the ETF industry, it is expected that billions will flow into the space, opening opportunities for funding new projects, blockchains, business models and new cutting-edge innovations. The future is increasingly digital and it is inevitable that so is finance."
Ben Zhou, co-founder and CEO of crypto exchange Bybit, said:
“The approval of the bitcoin spot ETFs by regulators is a testament to the resilience of bitcoin -- an asset that continues to outperform despite facing an array of challenges, from unclear regulation to negative commentary by opponents.
"I believe that the real significance of the bitcoin ETF extends far beyond today's market dynamics. It heralds a new epoch of institutional and wider crypto adoption, paving the way for an Ether ETF and mixed products like a Bitcoin and Gold ETF. It's a clear indicator that crypto's inherent value as a global transaction system with near-instant finality and total transparency is being realised."
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