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Federal regulators on Wednesday approved a new financial product that tracks the price of Bitcoin, a landmark moment for the cryptocurrency industry that proponents hope will increase investment in the technology.
The Securities and Exchange Commission authorized 11 applications by financial firms to offer what are known as “exchange traded funds” tied to Bitcoin, a potentially simpler way for people to invest in digital assets on traditional platforms like the Nasdaq. Some of the largest financial companies in the world, including the asset managers BlackRock and Fidelity, were approved to offer the products, known as E.T.F.s, which could begin trading as soon as Thursday.
The approval was hailed as a sign that mainstream financial institutions remain willing to use digital currencies even after 18 months of market crashes and high-profile bankruptcies. Since the fall, Bitcoin’s price has surged more than 60 percent, as traders bet that S.E.C.’s backing of the new crypto products would give the industry an imprimatur of regulatory legitimacy, drawing fresh investment from professional wealth managers and amateur traders.
The price of Bitcoin shot up on Tuesday after a post appeared on the S.E.C.’s official X account announcing the approval of the E.T.F.s, but dropped swiftly when Gary Gensler, the S.E.C. chair, said the agency’s account had been hacked.
The industry had to wait only until Wednesday, when the S.E.C. authorized the products in a regulatory filing. The long-awaited announcement brings a pillar of the mainstream finance system into the experimental world of crypto.
This is a developing story. Check back for updates.
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