Buying bitcoin is now easier than ever. The SEC approval, explained | About That

The U.S. securities regulator has approved Bitcoin exchange-traded funds (ETFs) in the United States, marking a huge milestone for Bitcoin and the broader cryptocurrency industry. Andrew Chang breaks down how it all works.

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So you think you have it what it takes to become a Bitcoin billionaire huge news in cryptocurrency today the SEC has officially approve the Bitcoin spot ETF this is going to make investing in Bitcoin a lot easier the sec’s decision this week to approve Bitcoin ETFs in the

United States is a big milestone for Bitcoin it brings what the uninitiated see as shadowy crypto into the mainstream and makes it easier than ever for people like you and me to not quite buy bit coin but get pretty close a Bitcoin ETF certainly exposes you to the

Same wild ups and downs so how does it work okay so let me start by being really clear this is not going to be a guide for how to buy these things this is more of an explainer of what they are and what an investor would be buying

Into these folks are going to help me through it Jacob Silverman and Clare Brownell they’re both Tech and crypto journalists so this has been a long time coming for the crypto industry it gives um a whole new class of investors access to bitcoin okay so what is a Bitcoin ETF

Well you can think of an ETF like a basket of Investments so if I want to buy individual stocks you know I could buy a share of Microsoft Apple Amazon like basically anything I want right Boeing Nike Home Depot Starbucks or I could buy an ETF the basket which might

Have all of the those things inside there are currency ETFs real estate ETFs technology ETFs green ETFs a fund is simply a way for investors to pull their money together in a big old pot it can give you some exposure to a sector that you might not know enough about to feel

Comfortable picking an individual stock there are even ETFs that track entire stock markets like if you want a piece of the entire S&P 500 there are ETFs for that a Bitcoin ETF is sort of the same thing except it’s a basket filled with primarily one thing Bitcoin as the

Underlying asset but wait a second you might say you just told me that an ETF is a basket of many things if the basket holds just one thing what’s the difference between buying a Bitcoin ETF and just buying Bitcoin directly you don’t have to necessarily have the thing

Itself or have some of the risk that are are might be involved with the underlying asset but you can still um H have some kind of financial interest let’s face it buying Bitcoin can be intimidating you have to find a reputable crypto exchange hopefully one that doesn’t make your money disappear

FTX has collapsed in recent weeks from being one of the largest cryptocurrency exchanges to losing 99% of their value then you have to set up a digital wallet and you ultimately are responsible for the management and security of that wallet so try not to lose your private

Key try not to get defrauded bergren and his girlfriend Zoe Westervelt say they had $24,000 stolen from them hacked out of their coinbase account and definitely try not to forget that you even own Bitcoin to begin with there have been all kinds of wild stories of people who

Uh you know had uh you know their Bitcoin on a hard drive and the hard drive got thrown away and they’ve you know uh tried to raise money to like dig up the landfill to try and find the hard drive that was on with an ETF a fund

Manager like black rock or Fidelity Giants in the investment space they buy the Bitcoin they manage and secure it and it all happens with layers and layers of regulatory approval and oversight by Financial authorities like the US Securities and Exchange Commission the SEC you’re just along for

The ride but this means three important things one you don’t actually technically own any Bitcoin at all the fund manager does you own a share of the ETF the basket which represents a claim on the Bitcoin being held by the fund two since they’re doing the work you

Have to pay for that service there’s a management fee you know for for the money managers for Wall Street especially this is attractive because they’re not you know they’ll trade anything they got to make their money somehow right but three and this is the big one you are just about as directly

Exposed to the volatility of Bitcoin as you can be even though you don’t own any yourself Bitcoin is extremely volatile let’s look at the price of Bitcoin in US dollars since 2015 when it really started shooting up in value by December 15th 2017 it smashes through all expectations approaching $20,000 a

Coin it doesn’t last long it immediately collapses losing more than 80% of its value over the following year from that low point the value almost quadruples again over the next 6 months stays in that ballpark for another year before showing explosive growth through the early pandemic more than

$60,000 us for a single coin there’s a spectacular crash Bitcoin loses almost half its value before reaching a new all-time high in November 2021 and then another big crash 75% of bitcoin’s value wiped out yet again now it’s rallying back up about $1,000 a coin since the

SEC gave the green light to bitcoin ETFs so is Bitcoin volatile yeah for sure but is it good volatile as in even its collapses The Valleys keep getting higher and higher that question is what makes the ride so attractive to so many people but if you read the SEC

Announcement about giving Bitcoin ETFs the green light it’s almost comical in a way how begrudging it is and by that I mean they make clear that legal challenges and court rulings pushed them into this approval and look at the message that they end on bitcoin is primarily a speculative volatile asset

That’s also used for illicit activity including ransomware money laundering sanction evasion and terrorist financing it continues we do not approve or endorse Bitcoin investors should remain cautious about the Myriad risks associated with Bitcoin and products whose value is tied to crypto but to be clear they’re just saying Bitcoin itself is volatile not

That the ETFs that they’re approving are an unsafe way to buy crypto in fact you could already buy Bitcoin ETFs before today they’ve been available here in Canada for years now it’s true if you bought in when those ETFs first popped up you generally only lost money over

The last few years but you can also see they’re on a big upswing at the moment and the thought with this latest SC approval in the states is that it opens up a huge market for a type of crypto that’s still yet to see truly mainstream uptake the US is the world’s largest

Capital Market the biggest in institutional investors and asset managers do business there and as such billions of new dollars are expected to now pour into the Bitcoin Market just the fact that these bigname financial institutions are getting in on this action is something that’s seen as something that’s a major change a major

Development even as uh people in crypto and Bitcoin especially talk about their anti-wall street or anti-rad fi um this is a big deal it’s going to bring in a lot of money and it’s going to move them towards the kind of um inter interconnectivity with traditional

Finance I think a lot of them really do seek in the end this boils down to legitimacy to bitcoin supporters it’s a sign that the establishment is finally starting to take Bitcoin seriously or they see it as a way to make Oodles of money themselves but at least in the

Short term one thing seems absolutely certain more people will invest in Bitcoin that could cause the price to go even higher and the incredibly speculative roller coaster ride it will continue