The SEC said it gave the green light to 11 ETFs for bitcoin even though it only faced a deadline for one application

The Securities and Exchange Commission on Wednesday approved the first exchange traded funds that hold bitcoin, saying it is still deeply sceptical about crypto currencies and that its decision did not mean it approves or endorses bitcoin.

The SEC said it gave the green light to 11 ETFs for bitcoin even though it only faced a deadline for one application. The agency said that would provide competition and a “level playing field.”

Bitcoin exchange traded funds could open the door to crypto currencies to many new investors who do not want to take the extra steps involved in buying actual bitcoin.

It is a major win for Wall Street, especially trillion-dollar fund managers such as BlackRock, Fidelity Investments and Invesco that have pushed hard to get the SEC to approve their applications. It is also a win for the crypto currency industry, which has needed a win after around two years of turmoil that has resulted in the failure of a number of crypto companies, most notably FTX in November 2022.

The SEC’s approval, nevertheless, was lukewarm at best. Gary Gensler, the agency’s chairman, has repeatedly said crypto currencies need more regulation and investor protections.

Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto, he said.

Other commissioners expressed alarm that the Securities and Exchange Commission agreed to approve the funds.

I am concerned that these products will flood the markets and land squarely in the retirement accounts of U.S. households who can least afford to lose their savings to the fraud and manipulation that seems prevalent in the spot bitcoin markets, Commissioner Caroline Crenshaw said in her dissent.

Some analysts think that exchange traded funds may help stabilize crypto prices by widening their use and potential audience. But many remain concerned that broad use of crypto exchange traded funds could put too much risk and volatility into Americans’ retirement accounts.

The notorious price volatility of Bitcoin, as well as its fluctuating values against stablecoins and other crypto currencies, could expose mainstream investors to a less familiar spectrum of investment risks, said Yiannis Giokas, senior director of Moody’s Analytics.