The crypto community leaps for joy as the United States Securities and Exchange Commission (SEC) approved spot exchange-traded funds (ETF) for Bitcoin.
Over the years, several asset managers have tendered applications for Bitcoin spot ETF but have failed to succeed. Emphatically, the regulatory body rejected such applications, claiming that Bitcoin ETFs would be vulnerable to market manipulation.
However, on January 10, 2024, the U.S. SEC approved the first-ever Bitcoin spot ETF applications for 11 firms after months of extensive deliberations. These approved applications include submissions from BlackRock, ARK Investments, and Fidelity.
How Will the ETFs Work?
The Bitcoin ETFs would be listed on traditional exchanges NASDAQ, NYSE, and CBOE (Chicago Board Options Exchange), comprising actual Bitcoin purchased from crypto exchanges and those held by custodians like Coinbase (NASDAQ:COIN) Global.
The recently approved products can either track a Bitcoin benchmark or utilize the index provided by CF Benchmarks. Notably, CF Benchmarks is a subsidiary of Kraken that aggregates trading data from various BTC/USD markets operated by top cryptocurrency exchanges.
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