US approves ‘‘bitcoin lite’’ ETFs

The US financial regulator has begun approving bitcoin-themed exchange-traded funds, but with important caveats.

US regulators are still on the fence about cryptocurrencies. The US Securities and Exchange Commission (SEC) has begun to approve bitcoin-themed exchange-traded funds (ETFs), but with important caveats. Last week the SEC gave the nod to the Volt Crypto Industry Revolution and Tech ETF, says Hassan Maishera on FXEmpire. The ETF will offer investors exposure to some of the leading crypto firms on the market, such as Nasdaq-listed MicroStrategy. But the SEC has still yet to approve any cryptocurrency ETF “that seeks to directly track the performance of bitcoin”. 

Investors use ETFs to track the performance of assets such as gold or equities, says Nathan Reiff on Investopedia. For all the hype, bitcoin remains difficult to invest in, requiring investors to turn to specialised exchanges and deal with “complex storage and security procedures”. A bitcoin ETF would allow a much larger pool of investors to buy bitcoin in the same way and on the same platforms where they trade stocks. 

The approval of “bitcoin lite” ETFs such as Volt is a “sop” to investors, says Steve Johnson in the Financial Times. US regulators are still refusing to approve any ETFs “that invest in the cryptocurrency itself”, even though similar vehicles have already been launched in Canada and parts of Europe. SEC chair, Gary Gensler, has called cryptocurrencies a “wild west” and an “asset class…rife with fraud, scams and abuse”.

Recommended

Is now a good time to buy a house?
Property

Is now a good time to buy a house?

Is now a good time to buy a house? That’s something many people might be asking as house prices, and mortgage rates, begin to decline
30 Jan 2023
Government consults on small pensions pots - here’s what to do if you have several small pension pots
Pensions

Government consults on small pensions pots - here’s what to do if you have several small pension pots

The Department for Work and Pensions has started consulting on helping workers who hold a number of small pension pots. We look at how the government …
30 Jan 2023
Self-assessment tax returns: what you need to know about getting your tax bill right
Income tax

Self-assessment tax returns: what you need to know about getting your tax bill right

Understanding how self assessment works can help you ensure you pay the right amount of tax, as well as avoid penalties for missing the deadline.
30 Jan 2023
Zoopla: house prices stalled at the end of 2022
House prices

Zoopla: house prices stalled at the end of 2022

The property market looks primed for a slow burn start, and buyers are turning towards flats instead of homes as they prioritise affordability, latest…
30 Jan 2023

Most Popular

Share tips of the week - 27 January 2023
Investments

Share tips of the week - 27 January 2023

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages
27 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
When will interest rates go up?
UK Economy

When will interest rates go up?

New interest rates will be announced on 2 February – we look at what to expect.
26 Jan 2023