The highly anticipated SEC vote on bitcoin ETFs impacted the cryptocurrency market, propelling the price of Bitcoin to over $47,000 on the day of trading.
On Wednesday, January 10th, the Securities and Exchange Commission (SEC) made an interesting decision, voting to allow everyday folks to participate in spot bitcoin ETFs. This move marks an opening for a broader audience to delve into Bitcoin speculation.
The approved ETFs are set to be listed on various exchanges, including Nasdaq, the New York Stock Exchange, and the Chicago Board Options Exchange. This is supposed to provide an additional layer of oversight. But the announcement went terribly wrong, amplifying concerns about the ETFs.
The highly anticipated SEC vote on bitcoin ETFs impacted the cryptocurrency market, propelling the price of Bitcoin to over $47,000 on the day of trading. Proponents argue that buying into a Bitcoin ETF provides a more accessible and secure option compared to directly purchasing Bitcoin. The latter involves storing the cryptocurrency in a digital wallet or holding it on an OTC exchange, exposing BTC owners to very real security risks, while ETFs offer a regulated and more secure alternative.
The SEC’s announcement approving bitcoin ETFs encountered a setback due to a social media misstep. A false post on X/Twitter prematurely claimed the approval of Bitcoin ETFs, leading to a brief surge in Bitcoin’s price. SEC Chair Gary Gensler clarified on his personal account that the SEC’s account had been compromised, and the purported approval was unauthorized and invalid. Understandably, the incident raised questions about the security controls of the SEC’s social media account (to say the least).
Despite a momentary episode of confusion on social media, the SEC’s approval signifies a milestone in the unpredictable and speculative journey of Bitcoin. Notably, major firms such as BlackRock and Fidelity are among the 11 issuers whose applications were accepted, allowing them to act as custodians and issuers of BTC ETFs.
The recent approval of Bitcoin ETFs by the SEC has increased the accessibility of BTC, prompting prudent commentary from Peter Schiff. Peter properly notes that Bitcoin functions as a wealth transfer tool, shifting the savings of one speculator to another. In a cautionary tweet, he states that the full impact on the speculative Bitcoin game remains uncertain, “jury is still out as to how much wealth will be lost, and who will lose it. But those who bought Bitcoin early and got out certainly took a lot of wealth away from those who got in later.”
Peter cautions against overly optimistic expectations for the bitcoin ETF approval rally. Describing it as a ‘buy the rumor, sell the rumor of the news’ event, Schiff suggests that waiting too long to sell Bitcoin may leave certain players holding the bag, Peter concludes with a final warning, “Those who wait for the actual news to sell their Bitcoin may discover that there are very few speculators left to buy!”
Amid varying opinions, the SEC’s decision has undeniably broadened the avenues for bitcoin speculation, providing alternatives to direct ownership. Regarding the bitcoin rally, this speculative casino game may potentially have many more years and significant rallies to come ($100k Bitcoin? Maybe). Nevertheless, as Peter frequently and wisely mentions, Bitcoin is not battle-tested; it’s not a store of value, and it will not endure in the long run.
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