Investors looking to bet on Bitcoin may soon have more options to choose from. Major financial firms like BlackRock, Fidelity and Invesco have filed applications to sell US exchange-traded spot funds directly tied to Bitcoin holdings, and Grayscale Investments LLC won a court ruling on Aug. 29 with its bid to merge its Bitcoin trust into one to convert ETFs. In the past, the US Securities and Exchange Commission has routinely rejected these products on the grounds that they fear volatility and possible manipulation. But the Grayscale ruling and BlackRock filing in particular could show that the cryptocurrency industry is gaining the upper hand.
ETFs, a $7 trillion industry, are part of a broader family of products known as exchange-traded products, although people often use “ETFs” to refer to all of them as they are by far the largest and most popular category are. Crypto-native companies and large Wall Street financial institutions alike are trying to come up with some sort of ETF that actually holds bitcoin, as opposed to products that invest in bitcoin futures. Futures-backed bitcoin ETFs have been available to US clients since 2021, but the SEC has not approved applications for so-called spot bitcoin ETFs. Issuers and investors are advocating making spot bitcoin ETFs accessible to retail and institutional investors in the US alike, a development that has the potential to significantly expand participation in the cryptocurrency industry.
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