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Bitcoin ETF Gets Approval from US SEC; What Does This Mean For Malaysian Investors?

After more than a decade of trying to get a Bitcoin ETF approval, the US Securities and Exchange Commission (SEC) on 10 January 2024 finally approved 11 Bitcoin ETFs that track the price of Bitcoin. 


This is a game-changer for the cryptocurrency industry and investors celebrated this announcement in a rally that saw Bitcoin rising past $47,000 following the approval.


But what does this mean if you’re a Malaysian investor? In this article, let’s explore the implications of this ground-breaking announcement and get a better understanding of how these ETFs will work.


bitcoin etf approval us sec

What Are ETFs?


ETFs are pooled investments, like a mutual or unit trust fund, but trade on stock exchanges, like a stock or bond, and track a specific index, sector or asset class such as gold. Unlike traditional mutual funds, they can be bought and sold throughout the day


An example of a well-known ETF is the Vanguard S&P 500 ETF.


How Will Spot Bitcoin ETFs Work?


According to CBS, a spot Bitcoin ETF allows investors to gain direct exposure to Bitcoin without holding it. Unlike regular Bitcoin ETFs, in which Bitcoin futures contracts are the underlying asset, Bitcoins are the underlying asset of a spot Bitcoin ETF.  


Each spot Bitcoin ETF is managed by a firm that issues shares of its own Bitcoin holdings purchased through other holders or through an authorized cryptocurrency exchange. The shares are listed on a traditional stock exchange.

 

Where To Buy Spot Bitcoin ETFs From Malaysia?


The ETFs will be listed on Nasdaq, NYSE and the CBOE


So, for us Malaysians, as long as you have a trading account like M+ Global or Interactive Brokers that gives you access to trade on US exchanges, then you should be able to buy a spot Bitcoin ETF.


Should You Buy Bitcoin Outright Or A Spot Bitcoin ETF?


Well, it depends on your specific investment goals, risk tolerance, and preferences.


If you value direct ownership, control, and potential for higher returns, buying Bitcoin outright may be suitable for you. 


On the other hand, if you prioritize convenience, regulation, and diversification, a spot Bitcoin ETF could be a more appealing option. 


This is because spot Bitcoin ETFs allow investors to gain exposure to the price of Bitcoin without the complications and risks of owning Bitcoin directly. 


Bitcoin ETF Approval: Implications for Malaysian Investors


Indirect Exposure


For those of you who have been wanting to get your hands on Bitcoin but may be a bit hesitant due to security or other reasons, you now have an indirect route to invest in Bitcoin through US-listed Bitcoin ETFs. 


By purchasing shares in these ETFs, you can gain exposure to the price movements of Bitcoin without having to navigate the complexities of cryptocurrency exchanges or wallet management.


Diversification Opportunities


Bitcoin spot ETFs also offer diversification opportunities for Malaysian investors. 


Rather than putting all your investment capital into a single asset class like stocks or bonds, you can include Bitcoin as part of your diversified investment portfolio. This can potentially help spread risk and enhance long-term returns.


Price Impact


As more investors gain easier access to Bitcoin through ETFs, there is potential for upward pressure on Bitcoin's price


Institutional investors, in particular, may view these regulated investment products as a safer way to enter the cryptocurrency space, potentially driving demand.


So, for those of you who are already invested in Bitcoin, you may very well see huge returns on them – should you choose to sell!


Final Thoughts: Bitcoin Spot ETFs Approval from US SEC


The approval of 11 Bitcoin ETFs by the US SEC marks a significant milestone in the world of cryptocurrencies. 


While the immediate impact may be more pronounced for US investors, Malaysian investors can also benefit from these developments. They now have the opportunity to gain exposure to Bitcoin through regulated and easily accessible investment vehicles. 


However, it is essential for Malaysian investors to navigate the regulatory landscape carefully and consider the potential risks associated with these investments. 


As the cryptocurrency market continues to evolve, as an investor, you should stay informed and make well-informed decisions to capitalize on the opportunities presented by Bitcoin ETFs.


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