Bitcoin ETFs have become everyone's favorite

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The cryptocurrency sector had an impressive start to the year, as bitcoin exchange-traded funds (ETFs) were launched in mid-January, garnering approximately $2 billion in the initial three days of trading. Following a prolonged wait, the US Securities and Exchange Commission (SEC) surprised some industry participants by granting milestone approval to 11 spot bitcoin ETFs. However, for veteran digital asset investors, this development was long overdue.
Bitcoin, introduced in 2009 as the pioneer cryptocurrency, had been deemed excessively risky and volatile for an extended period. Advocates for the potential of cryptocurrency had persistently advocated for this significant moment.
The turning point for the SEC occurred in August 2023 when Grayscale, the world's largest digital currency asset manager, secured a crucial legal victory in a bitcoin lawsuit against the regulatory body. In the weeks leading up to this, financial behemoth BlackRock entered the cryptocurrency arena by boldly filing for a spot bitcoin ETF, opening the door for other major players like Invesco, Fidelity, and Franklin Templeton to follow suit.

Why was there a need for a Bitcoin ETF?

ETFs serve as a portfolio function allowing investors to simultaneously invest in a diverse range of assets. With the approval of Bitcoin ETFs, this cryptocurrency can now be acquired directly from the spot market at its current market price. Under the new implementation, Bitcoin ETFs will also begin trading on the New York Stock Exchange (NYSE), Chicago Board Options Exchange (CBOE), and Nasdaq. To address market manipulation concerns related to ETFs, Nasdaq and CBOE have collaborated with Coinbase to establish a monitoring program, in cooperation with the SEC.

What is the difference from directly buying Bitcoin?

Spot Bitcoin ETFs enable investors to access Bitcoin without being exposed to cyberattacks on cryptocurrency exchanges and without the need to acquire a digital wallet.
Following the collapse of FTX, whose founder Sam Bankman-Fried was convicted of fraud, and the admission of money laundering by Changpeng Zhao, CEO of the world's largest crypto exchange Binance, investors have become more cautious in approaching the crypto markets. On the other hand, Spot Bitcoin ETFs can be purchased more securely through investment accounts as they trade on tightly regulated exchanges.

Let's contiue into to Bitcoin ETF's news!

Following the introduction of several ETFs last month, BlackRock and Fidelity saw rapid success, attracting over $1 billion in inflows within days. While other firms are proceeding more cautiously, their confidence remains high. Patrick O’Connor, head of Global ETFs at Franklin Templeton, expressed excitement about Bitcoin offerings, considering them a valuable addition to their product lineup. In the first week of trading, bitcoin ETFs quickly became the second-largest ETF commodity in the US, surpassing silver.
Global investment firm Franklin Templeton, managing assets exceeding $1.4 trillion, recently received approval from the U.S. Securities and Exchange Commission (SEC) to launch a spot Bitcoin exchange-traded fund (ETF). Jenny Johnson, CEO of Franklin Templeton, discussed the significance of this development in the investment world, emphasizing Bitcoin's role in providing investors with diverse investment strategies and serving as a kind of "insurance" against financial instability. Johnson underscored the company's commitment to blockchain innovation, noting that Franklin Templeton has previously engaged in blockchain technology, utilizing it for tokenization efforts and demonstrating a proactive approach to incorporating digital assets into traditional investment frameworks. The introduction of a spot Bitcoin ETF further solidifies Franklin Templeton's leading position in integrating cryptocurrency into mainstream finance.
Bitcoin ETF pioneers are now eyeing the next challenge. Grayscale and BlackRock are actively seeking approval for spot Ether ETFs, anticipated to be granted by the end of May. The enthusiasm generated by the SEC's landmark ruling has extended globally, with Asia also embracing the idea. Hong Kong is expected to launch Bitcoin ETFs by March, and rumors suggest that South Korea and Indonesia are exploring similar options.

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Reference:

Üç soruda SEC'nin Bitcoin ETF kararı: Kripto paralar için neden önemli? | Independent Türkçe (indyturk.com)

Bitcoin ETFs Quickly Attract Billions | Global Finance Magazine (gfmag.com)

Franklin Templeton spot Bitcoin ETF'sini piyasaya sürdü Yazar Investing.com

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