• by Tanya Gazdik , January 10, 2024

Move over Elon Musk. A decision by regulators today will allow mainstream investors to buy and sell bitcoin as easily as stocks and mutual funds.

Eleven applications filed by asset managers including BlackRock, Fidelity Investments, ARK Investment Management, Invesco, WisdomTree, Bitwise Asset Management, Valkyrie and Grayscale Investments have been approved to list. 

The new funds, known as spot-bitcoin ETFs because they buy and sell the digital currency itself, are expected to begin trading on Thursday.

Expectations of U.S. regulatory approval for such funds drove the price of bitcoin to the highest level in about two years. 

“It is a landmark moment for the cryptocurrency industry that proponents hope will increase investment in the technology,” according toThe New York Times. “The approval was hailed as a sign that mainstream financial institutions remain willing to use digital currencies even after 18 months of market crashes and high-profile bankruptcies.”

Since the fall, bitcoin’s price has surged more than 60% as traders bet that the SEC’s backing of the new crypto products would legitimize the industry.

"Until now, everyday investors who wanted to buy and sell digital currencies have had to either trade on crypto exchanges and incur hefty transaction fees or purchase products that track bitcoin in less direct ways,” according toThe Wall Street Journal. “At least half a dozen bitcoin-futures ETFs are already on the market. Those funds use futures contracts to provide exposure to bitcoin price moves, though they have been criticized for often straying from bitcoin’s price.”

The digital currency fell to just below $46,000 late Wednesday, up from $17,000 in January 2023.

“The Securities and Exchange Commission made the announcement roughly 24 hours after a fake social-media post claimed those approvals had already been granted,” according to Yahoo Finance. “The chaos triggered by that unauthorized post on X reverberated from Wall Street to Washington while attracting new scrutiny to the SEC, a longtime foe of the industry that is still in the middle of a widespread crackdown on some of crypto’s major players.”

While the move does end “crypto drama,” per Yahoo Finance, don’t take it as an endorsement, says SEC chair Gary Gensler.

He said in a statement that his agency "did not approve or endorse bitcoin" when it signed off on the new products and called Wednesday's announcement "the most sustainable path forward" following a key court defeat on this issue last summer.

"Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto," he said in his statement.

SEC commissioner Caroline Crenshaw published a dissenting opinion that called the agency's actions "unsound and ahistorical."

"I am concerned that these products will flood the markets and land squarely in the retirement accounts of US households who can least afford to lose their savings to the fraud and manipulation that appears prevalent in the spot bitcoin markets," she said in her statement.

Even the currency’s once-loudest cheerleader expressed some doubts about crypto last year. 

Musk, who helped fan the flames of the huge 2021 bitcoin and crypto bull run, has since backed off, according toForbes.

"I'm not advising anyone to buy crypto or bet the farm on dogecoin," Musk said during a virtual appearance at The Wall Street Journal’s CEO Council Summit in London last year. "Maybe you should, but let me advise you that would be perhaps unwise.”

However, Musk added that dogecoin, a bitcoin-like cryptocurrency that was originally created as a "joke," is still his favorite cryptocurrency because it has "the best humor" and "it has dogs,” according toForbes.