2024-01-11 00:33:01
Cryptocurrencies are getting closer to the general public. The American stock market regulator authorizes large financial institutions to offer financial products based on bitcoin. A decision considered a major step for the adoption of cryptocurrencies and which could shake up the sector.
Published on: 01/10/2024 – 11:33 p.m. Modified on: 01/10/2024 – 11:46 p.m.
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The product authorized on Wednesday January 10 is an ETF (Exchange traded fund), an index fund which allows investors to benefit from developments in bitcoin without directly placing their money in the digital currency. Concretely, they buy shares of the fund, which they can resell at any time, and not bitcoin. The fund’s assets are placed in cryptocurrencies.
In this case, 11 financial institutions can from this Thursday offer ordinary investors the opportunity to invest indirectly in bitcoin. The SEC has given authorization to 11 different companies to launch their own products, including major Wall Street houses like Fidelity and BlackRock, according to the document published on the regulator’s website. The market had already reached a milestone, in October 2021, with the listing of the first ETF invested not directly in bitcoins, but in futures contracts linked to the cryptocurrency.
Until now, access to digital currencies required opening an account on a cryptocurrency exchange platform and converting a traditional currency (issued by a Central Bank), such as the dollar.
Cryptocurrency specialists hope this will expand their sector. For them, the advantage is that going through recognized companies like BlackRock or Fidelity, to name only the largest, is much more reassuring and much less nebulous than seeking to invest directly in digital currencies. They are known for their volatility and their market for its opacity
“A turning point”
This decision was expected. It was even anticipated by 24 hours by a false press release from the American stock market policeman on his X account (formerly Twitter). The SEC then indicated that his account had been hacked, the time it took to post the message. Result, a heatwave and a bitcoin which climbs to 47,914 dollars per unit. A few months ago, the value was still $17,000, notably due to upheavals, bankruptcies and other scams in a cryptocurrency sector that hopes to be a little less scary.
Also read: A fake tweet sends bitcoin skyrocketing
The stock market policeman had already rejected, on numerous occasions, marketing requests for similar products in the past, but a recent development has changed the situation. At the end of October, a federal appeals court in Washington confirmed that the SEC was not justified in refusing the approval of its bitcoin ETF to asset manager Grayscale. The president of the SEC, Gary Gensler, although known for his reservations regarding cryptocurrencies, then recognized that the regulator was now required to take this case law into account.
The arrival of an ETF is “ a turning point for digital assets and signals a move towards mainstream adoption and (their) legitimacy”, commented Thomas Tang, vice president of private equity firm Ryze Labs. “ By their mere existence within a regulated framework, bitcoin ETFs will give institutional credibility to digital assets “, he added.
Gary Gensler has often compared the world of cryptocurrencies to the “wild west”. During a US Senate hearing in July, he warned the general public against “ these highly speculative assets », unregulated and risky.
Many leading financiers and big bosses have also publicly expressed their skepticism, or even their opposition to these digital currencies. “ The only real use “, cryptocurrencies, is that they benefit “ to criminals, drug traffickers », pour « money laundering, tax fraud “, declared, in early December, the CEO of the largest bank in the world, JPMorgan Chase, Jamie Dimon. “ If I were the government, I would put an end to it “, he declared.
(And with AFP)
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