Regulators have approved a new bitcoin investment fund that makes it easier for people to buy bitcoin. Critics worry it will mask the risks of buying cryptocurrency.
SCOTT SIMON, HOST:
This week, regulators approved a new kind of cryptocurrency investment called a Bitcoin exchange-traded fund – got it? – or ETF. Crypto companies are hopeful it will move crypto into the mainstream. And as NPR’s David Gura reports, critics worry that investors won’t fully understand the risks.
DAVID GURA, BYLINE: These new investment funds make it a lot easier to invest in Bitcoin.
CATHIE WOOD: An ETF just simplifies access.
GURA: That’s Cathie Wood, the CEO of Ark Invest. And she just got the green light from the government to sell a new Bitcoin ETF. Hers is one of 11 total. ETFs are popular investments that trade like stocks. They’re now a $7.7 trillion industry. And these new funds will track the price of the world’s best-known cryptocurrency.
WOOD: I do think that Bitcoin is the biggest idea out there.
GURA: Wood argue that this digital currency will revolutionize the way we do business. And she’s also a true believer. Her firm bought its first Bitcoin in 2015 for about $250. Today, it’s trading above $43,000. Because buying actual cryptocurrency is kind of complicated, this new option is bound to boost crypto’s popularity, Wood says.
WOOD: The ETF has been battle-tested and is a vehicle that, actually, investors love.
GURA: But not everyone is convinced, including several members of the Securities and Exchange Commission, the regulators that OKed these new investments. This was a split decision. Critics note many cryptocurrencies are extremely volatile.
DENNIS KELLEHER: We fear many investors are going to end up losing money and being harmed here.
GURA: Dennis Kelleher is the president and CEO of Better Markets. That’s a nonprofit based in Washington that focuses on consumer protection. Kelleher fears these new funds will give…
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