The Securities and Exchange Commission (SEC) on Wednesday approved the first US-listed exchange traded funds (ETFs) to track bitcoin.
The long-awaited move cleared the way for 11 ETFs to list on leading exchanges, including the New York Stock Exchange.
The regulators made it clear the decision "did not approve or endorse bitcoin."
An ETF would provide a way to invest in bitcoin without having to buy the cryptocurrency outright.
Less than 24 hours before the approval, the SEC described as "unauthorized" a social media statement announcing the ETFs approval. The price of bitcoin briefly spiked Tuesday after the announcement.
What does the SEC decision mean?
The SEC approved applications, including from BlackRock, Ark Investments, 21Shares, Fidelity, Invesco and VanEck, among others. Some products are set to begin trading as early as Thursday.
Standard Chartered analysts suggested the funds could draw between $50 billion and $100 billion this year alone. This could drive bitcoin prices as high as $100,000.
The SEC suggested it remained deeply skeptical about cryptocurrencies, despite approving the ETFs. For a decade, the SEC had resisted the move, over fears the funds could be easily manipulated.
The path that led to ETFs
Last year, a federal appeals court in Washington declared that the SEC was not justified in rejecting asset manager Grayscale's approval for its bitcoin ETF.
Since then, the regulatory greenlight has been highly anticipated. The price of bitcoin has jumped about 70% since October.
"Like many of Grayscale’s future-forward investors, we believed that bitcoin could change the world, and we were and remain excited at the prospect of democratizing access to this asset through a US regulated investment vehicle,” said Grayscale CEO Michael Sonnenshein after the ETF's approval.
