SEC Approves Bitcoin ETFs, but Gensler Issues Caution on Volatility

On Wednesday, the US Securities and Exchange Commission (SEC) gave the green light to 11 issuers, including notable names like Grayscale Bitcoin Trust, BlackRock Inc, Fidelity Investments, Invesco Ltd, and Ark/21Shares, paving the way for the launch of Bitcoin exchange-traded funds (ETFs), some of which could start trading as early as Thursday.

Marcelo Sampaio, the Co-Founder and CEO of Hashdex, one of the approved issuers, commented on the approval, stating: “This marks a new chapter for the industry, as US investors can now fully participate in the potential of Bitcoin.”

Robert Jenkins, Global Head of Research at LSEG Lipper, echoed a similar optimistic outlook, saying, "Investors are keen to incorporate cryptocurrency into their portfolios, even without easy access to ETF products. The approval of spot Bitcoin ETFs signals more organised oversight and transparency, which will likely benefit investors."

However, while the approval was a significant step forward, SEC Chair Gary Gensler issued a cautious note. He acknowledged the approval but warned investors about the speculative and volatile nature of Bitcoin, describing it as “primarily a speculative, volatile asset.” Gensler clarified, “Although we have approved the listing of certain spot Bitcoin ETP shares, this does not signify an endorsement of Bitcoin. Investors should be mindful of the inherent risks tied to Bitcoin and other crypto-linked products.”