US bitcoin ETF, a game-changer for crypto: All questions answered
SEC) on Wednesday approved exchange-traded funds (ETFs) that track the price of bitcoin in a game-changer for the cryptocurrency industry which has been trying for more than a decade to launch such a product.
Multiple asset managers have applied for bitcoin ETFs since 2013, but the SEC rejected them on the grounds they would be vulnerable to market manipulation. In August, however, a court found the SEC was wrong to reject Grayscale Investments' bitcoin ETF application, forcing the agency to rethink its stance.
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Offering CollegeCourseWebsiteNorthwestern UniversityKellogg Post Graduate Certificate in Product ManagementVisitIndian School of BusinessISB Professional Certificate in Product ManagementVisitIIT DelhiIITD Certificate Programme in Data Science & Machine LearningVisit On Wednesday, SEC approved applications from ARK Investments, BlackRock and Fidelity, among others. Here is how the products work and why the approval is seen as a big deal:
How will the ETFs work?
They will be listed on Nasdaq, NYSE and the CBOE. Their assets will comprise physical bitcoin purchased from crypto exchanges and held via custodians like Coinbase Global.
The products track a bitcoin benchmark. Some track an index provided by CF Benchmarks, a subsidiary of crypto exchange Kraken, which aggregates trading data from multiple bitcoin-USD markets operated by big cryptocurrency exchanges.
To address the SEC's manipulation concerns, Nasdaq and CBOE have created a market surveillance mechanism with Coinbase, the largest US cryptocurrency exchange.
Issuers plan to charge fees ranging from 0.20% to 0.8%, well below the broader ETF market average.
Is it different to buying bitcoin
