US SEC approves 11 Bitcoin ETFs

ETFs could draw $50 billion to $100 billion this 2024

Despite Bitcoin's price volatility and concerns revolving around investor protection, the U.S. SEC has approved 11 spot Bitcoin ETFs.

The approval was granted under Section 6(b) of the Investment Company Act of 1940.

This decision allows everyday investors to gain exposure to Bitcoin without directly owning the cryptocurrency. These ETFs, set to begin trading Thursday, could integrate Bitcoin into common investment vehicles like 401(k)s, IRAs, and pension plans, potentially leading to its mainstream acceptance.

SEC Chair Gary Gensler clarified that while the SEC approved these products, it does not endorse Bitcoin, highlighting the risks associated with crypto investments.

Commissioner Caroline Crenshaw expressed a dissenting opinion, voicing concerns about the potential risks of these products in the markets, particularly for households' retirement savings.

The list of approved ETFs includes major Wall Street firms and well-known names in the crypto world. This competition among issuers to offer lower fees aims to attract a broad investor base once the ETFs begin trading. Big banks like JPMorgan Chase and Goldman Sachs are also participating in this new development.

Our Opinion:

The approval of Bitcoin ETFs by the US SEC is undoubtedly a significant milestone in the cryptocurrency industry, thus affecting alternative lenders directly and indirectly. Increased acceptance of cryptocurrencies could alter the landscape of the alternative financing industry, providing more possibilities for borrowers and lenders. However, the inherent risks associated with cryptocurrencies necessitate careful consideration of this new investment avenue. Alternative lenders stay informed, continuously evaluating the potential advantages and challenges that come with such development.

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