11 Bitcoin ETFs approved: What it means for NZ investors

New Zealand investors will be able to get direct exposure to the price of Bitcoin on share trading apps like Sharesies after the United States Securities and Exchange Commission (SEC) approved the listing and trading of exchange traded funds tied to the price of the cryptocurrency. “We expect most, if not all, of the Bitcoin ETFs to be filed by US SEC will be available on Sharesies,” a spokesperson told the Herald . “This will be through our US execution broker. The usual Sharesies transaction fees will apply.” Easy Crypto founder Janine Grainger said the SEC’s decision legitimised the cryptocurrency as an investable asset - although, in her view, Bitcoin was always legitimate. “15 years later, traditional finance wants in on the action,” she said in a LinkedIn post. “What the approval has done is help to foster consumer trust. In a few minutes, millions have made the jump from, ‘Should I invest in crypto?’ to, ‘Where can I invest with the lowest fees?’” Domestic funds provider Kernel would not look to launch a copy-cat Bitcoin fund here, founder and chief executive Dean Anderson told the Herald ahead of the SEC approval. “If they do get off the ground in the US, that will likely satisfy most investors.” The eagerly-awaited approval from the SEC announced on Thursday morning, after an online hack and false approval a day earlier , allowed major investment firms BlackRock, Fidelity, Ark Invest, Invesco and Grayscale, among others, to trade shares in funds holding Bitcoin. In total, 11 funds were approved for listing and trading on the Nasdaq, New York Stock Exchange Arca and Chicago Board Options Exchange. The price of Bitcoin increased 0.72 per cent on the day of the announcement to US$46,453 ($74,599) - following a 5 per cent intra-day decline the day prior due to the false approval. Australian institutional cryptocurrency investment firm Magnet Capital expected BlackRock’s ETF, named iShares Bitcoin Trust, to begin trading from Friday (NZT). “This is a watershed moment for Bitcoin as it heralds in the opportunity for simple and easy institutional adoption of this asset,” chief investment officer Benjamin Celermajer said in an emailed note to wholesale investors. The approval ended a decade-long battle from the cryptocurrency industry to offer investors exposure to the market spot price of Bitcoin, going up against a regulator that recently took legal action against popular cryptocurrency exchanges Binance and Coinbase. Chairman Gary Gensler continued to warn investors about the asset in a written statement upon the ETF approvals. “While we approved the listing and trading of certain spot Bitcoin ETP [exchange traded product] shares today, we did not approve or endorse bitcoin. “Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.” The approval was not entirely agreed upon internally, with SEC commissioner Caroline Crenshaw publicly dissenting the changes that allowed the ETFs, over concern that “spot bitcoin markets are subject to fraud and manipulation”. “These Commission actions are unsound and ahistorical,” she wrote in this statement . “And worse, they put us on a wayward path that could further sacrifice investor protection.” Whereas, Commissioner Hester Peirce, an outspoken pro-Bitcoin ETF regulator, applauded the move - and pointed out the unfair process and obstruction the SEC historically applied to Bitcoin ETF applicant. “You need not be a seasoned securities lawyer to spot the difference in treatment of bitcoin-related ETP (exchange trade product) applications compared to the many other ETP applications that have been routinely filed and approved over the past decade. “Today marks the end of an unnecessary, but consequential, saga.” Peirce pointed to the riskier, less efficient means that investors were forced to use to gain exposure to Bitcoin, in the absence of an exchange-traded product. She suggested other cryptocurrency funds could have an easier road to approval following the latest decision. Meanwhile, the SEC was working with the Federal Bureau of Investigation (FBI) after its social media X (formerly Twitter) account was hacked this week and a false post announced the approval of the Bitcoin ETFs. In an emailed statement providing more detail of the hack, an SEC spokesperson said on Thursday that the original post was not drafted or created by the agency - killing rumours that it was a legitimate post accidentally published one day early. Madison Reidy is the host of the NZ Herald’s investment show Markets with Madison . She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.