By Adedapo Adesanya
The US Securities and Exchange Commission has voted to allow mainstream investors to buy and sell Bitcoin (BTC) as easily as stocks and mutual funds.
The SEC decision clears the way for the first US exchange-traded funds that hold bitcoin to be sold to the public.
Market analysts have hailed the decision as a game-changer for the industry, boosting Bitcoin-Synergy.
Expectations of US regulatory approval for such funds drove the price of Bitcoin to the highest level in about two years as the digital currency traded just below $46,000.
The decision comes after an official SEC social media account on Tuesday falsely said that Bitcoin exchange-traded funds (ETFs) had been approved. Later, the SEC said the account had been compromised.
The regulator has for years opposed a so-called spot Bitcoin fund, with several firms filing and then withdrawing applications for ETFs in the past.
The SEC Chief, Mr Gary Gensler has been an outspoken critic of crypto during his tenure, and he dispelled the rumour on Tuesday.
However, the regulator appeared to change course on the ETF question in 2023, possibly due in part to an August loss to Grayscale in a court decision that criticized the SEC for blocking BTC ETFs while allowing funds that track Bitcoin futures.
The decision will likely lead to the conversion of the Grayscale Bitcoin Trust, which holds about $29 billion of the cryptocurrency, into an ETF, as well as the launch of competing funds from mainstream issuers such as BlackRock’s iShares and Fidelity.
More than 10 different firms are now in the formal process of a launch, with the competition to become one of the market leaders expected to lead a rise in the most valued crypto asset.
The approval of the ETFs also marks a win for the industry that has been mired in scandal including the conviction of FTX founder, Mr Sam Bankman-Fried and multiple actions against Binance and its founder, Mr Changpeng Zhao.
Dipo Olowookere