Sec approves bitcoin investment fund, worrying cryptocurrency critics

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 mom-and-pop investors a false sense of comfort

'cause they're already familiar with other kinds of ETFs and millions of them are already customers of, or at least know of, some of the big money managers who have gotten in on

the game, including Fidelity and BlackRock. Kelleher also notes the world of crypto has a reputation for being kind of scammy. The Securities and Exchange Commission has sued dozens of

crypto companies and investors and promoters. KELLEHER: The SEC in approving this ETF is like knowing there's a very high-crime area with no cops on the beat. GURA: And despite that,

Kelleher says, they've authorized companies... KELLEHER: To send buses to drop off people with wallets and lots of jewelry showing at midnight on those very same streets. GURA: SEC

Chair Gary Gensler did vote to approve these new investments, but he seems to have done so reluctantly. A recent court decision forced his hand. He's repeatedly warned investors of the,

quote, "myriad risks" associated with Bitcoin and crypto securities, most recently on CNBC on Friday. (SOUNDBITE OF ARCHIVED RECORDING) GARY GENSLER: It's rife with

conflicts. It's rife with fraud and abuse. GURA: That's why on the first day these new investments started trading on the Nasdaq and the New York Stock Exchange, one of the largest

investment managers in the world announced it's steering clear of them. Vanguard said they're not a building block of a well-balanced, long-term investment portfolio, and it

won't make Bitcoin ETFs available to its tens of millions of customers. David Gura, NPR News, New York. (SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR. _NPR transcripts

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