SEC Approves Bitcoin ETFs, Taking Crypto Mainstream
Last week, Gary Gensler, the chairman of the Securities and Exchange Commission (SEC) known for his disdain for cryptocurrencies, made a surprising move by approving the sale of exchange-traded funds (ETFs) that follow Bitcoin’s “spot” price. This decision marks a significant step towards mainstreaming crypto as an asset class.
What are Bitcoin ETFs?
ETFs are investment vehicles that track an underlying index or investment style. They have gained popularity among small investors who prefer not to own shares outright. With Bitcoin ETFs, investors can gain exposure to the cryptocurrency without having to purchase it directly. Instead, they can buy shares of the ETF that reflect the daily price of Bitcoin.
Affordable Access to Crypto
One of the advantages of Bitcoin ETFs is their affordability. As the price of a single Bitcoin is around $43,000, owning a whole Bitcoin may not be feasible for many average investors. However, with a small management fee as low as 0.2%, investors like your Aunt Millie can now access this asset class without the hassle of buying fractional shares.
Despite the humorous remark, the approval of Bitcoin ETFs raises questions about Gensler’s motives. One theory is that Gensler recognizes that cryptocurrency, including Bitcoin, is already being used by drug dealers and other criminals for illicit activities. By regulating and monitoring the market, Gensler and his team can keep a closer eye on these activities and protect investors from potential fraud.
Moreover, Gensler may have felt compelled to approve Bitcoin ETFs due to the resilience of the crypto market. Despite the crash of FTX and the fraudulent activities of its founder, Sam Bankman-Fried, digital currencies have proven their staying power. Approving ETFs traded on reputable exchanges like Nasdaq and the New York Stock Exchange allows regulators to maintain oversight and prevent future scandals.
The Influence of Larry Fink
Another significant factor in Gensler’s decision is the influence of Larry Fink, the founder and CEO of BlackRock, the world’s largest money manager. Fink, who was once skeptical of cryptocurrencies, now sees them as a store of value comparable to gold. BlackRock is one of the firms offering the new Bitcoin ETFs, and Fink’s support likely put pressure on Gensler to approve them.
By normalizing Bitcoin through ETFs, Fink aims to establish it as a legitimate asset class among financial advisers. This could lead to increased adoption of cryptocurrencies in investment portfolios, benefiting BlackRock’s ETFs due to their strong relationships with major brokerage firms.
Shari Redstone’s Media Empire
In unrelated news, Shari Redstone, the owner of Paramount Global, has been seeking to sell her stake in National Amusements, the controlling shareholder of her media empire. Interested buyers, including RedBird Capital and Skydance Media, have signed non-disclosure agreements (NDAs). Redstone hopes to secure around $2 billion from the sale to preserve her family’s wealth as the legacy media business faces challenges.
While reports of Redstone shopping her stake and signed NDAs are not groundbreaking, they shed light on the difficulties of finding buyers for legacy media assets in today’s market.
