The SEC has approved new exchange-traded products tied to Bitcoin and Ethereum

The U.S. Securities and Exchange Commission has approved the launch of six new exchange-traded products. Two of them will be linked to the price movements of Bitcoin and Ethereum.

For example, if Bitcoin rises 1% in a single day, the product's price will increase by roughly 3%. Conversely, in the case of a 1% decline, its price will fall by roughly 3%. In financial markets, this is referred to as triple leverage.

To create these products, Bitcoin and Ethereum themselves are not purchased. Instead, futures are used — contracts whose value depends on changes in the price of a specific asset.

The remaining four products will work on the same principle, tracking the prices of gold, silver, oil and natural gas. If the price of any of these changes by 1% in a single day, the corresponding product's price will change by roughly 3%.

SEC approval does not mean that trading in these products can begin immediately. Companies must first complete the procedures required for registration. After that, investors will be able to benefit from price movements in Bitcoin and Ethereum without buying the cryptocurrencies themselves.

In the same week, the SEC also put forward a proposal to change the rules for custody of crypto assets.

Source: Investing.com