A bitcoin ETF will allow the volatile and unregulated cryptocurrency to be traded on legitimate stock exchange platforms like the Nasdaq
Bitcoin briefly soared above $35,000 for the first time Tuesday since May 2022 on the possibility of the cryptocurrency’s exchange-traded fund (ETF) reaching mainstream brokerages soon.
Several attribute the rise to BlackRock acquiring a ticker symbol and a CUSIP number for its forthcoming spot bitcoin ETF, which is now listed on the Depository Trust and Clearing Corporation (DTCC), the entity responsible for clearing Nasdaq trades.
The ETFs would allow investors to gain exposure to bitcoin’s price movements without owning the cryptocurrency directly.
What is an ETF?
An ETF is similar to a mutual fund but can be bought and sold on the stock exchange.
A bitcoin ETF will allow the highly volatile and unregulated cryptocurrency to be traded on legitimate stock exchange platforms like Nasdaq rather than less-regulated crypto platforms like FTX and Binance, among others.
Why the excitement?
A BlackRock bitcoin ETF would give the cryptocurrency legitimacy. The company is the largest provider of ETFs in the world and is awaiting the US Securities and Exchange Commission’s (SEC) approval of the fund.
The SEC previously denied another investment giant Grayscale’s application for a bitcoin ETF.
But an appeals court overruled the decision in August.