Regulators Approve New Type of Bitcoin Fund in a Blessing for the Crypto Industry

Federal regulators on Wednesday approved a new financial product that tracks the price of Bitcoin, a milestone for the cryptocurrency industry that proponents hope will increase investment in the technology.

The Securities and Exchange Commission has approved 11 applications from financial companies to offer so-called “exchange traded funds” tied to Bitcoin, a potentially easier way for people to invest in digital assets on traditional platforms like the Nasdaq. Some of the world’s largest financial firms, including asset managers BlackRock and Fidelity, were approved to offer the products, known as ETFs, which could start trading as early as Thursday.

The approval was hailed as a sign that mainstream financial institutions remain willing to adopt digital currencies, even after 18 months of market crashes and high-profile bankruptcies. Since the fall, Bitcoin’s price has risen more than 60 percent as traders bet that the SEC’s backing of the new crypto products would give the industry an imprimatur of regulatory legitimacy, attracting new investments from professional asset managers and amateur traders.

Bitcoin’s price soared on Tuesday after a message appeared on the SEC’s official had been hacked.

The industry only had to wait until Wednesday, when the SEC approved the products in a regulatory filing. The long-awaited announcement brings a pillar of the mainstream financial system into the experimental world of crypto.

This is a development story. Check back for updates.