Crypto's latest big moment is worthy of one big reminder too.
The US dollar is still the US dollar, and crypto is, well, just an investment vehicle.
Said reminder comes compliments of the International Monetary Fund (IMF), one of the foremost global authorities on payments and financial stability.
"Our view is that we have to differentiate between money and assets. When we talk about crypto, we are actually talking about an asset class. It could be backed up and in that sense, more secure and less risky, or it could be not backed up and, therefore, a riskier investment. But it is not exactly money. It's more like a money management fund," IMF managing director Kristalina Georgieva told Yahoo Finance Live.
Georgieva's comments came mere hours before the SEC paved the way for the debut of new spot bitcoin-backed ETFs last week.
Regulators gave the all-clear sign to financial institutions such as Cathie Wood's Ark and BlackRock (BLK) to debut these new ETFs. A total of 11 spot bitcoin ETFs were approved.
Average investors will now be able to gain exposure to the world’s largest cryptocurrency without having to own it. Crypto in your 401k? Hey, if you want that risk and can sleep at night.
The ETFs began trading last Thursday, with the crypto-verse now turning attention to potential ethereum ETF approvals this spring.
It's a big moment for the crypto industry, which has endured boom and bust periods over the past five years and the downfall of onetime prominent leaders in FTX's Sam Bankman-Fried and Binance's CZ.
"Our simple advice to all investors is — buy the dip and focus on the new bitcoin adoption cycle. The minor selloffs are opportunities in view of the asymmetric upside ahead," said Bernstein analyst Gautam Chhugani in a client note reviewed by Yahoo Finance.
Coinbase CFO Alesia Haas told Yahoo Finance's Seana Smith that it was "a landmark day for crypto," but "this is a long journey and this is just one step along the way" in the bid for crypto to gain more widespread acceptance.
Haas believes the spot bitcoin ETF approval will "invite trillions of dollars that were previously not able to access crypto assets and not able to access bitcoin."
Despite the latest bitcoin hoopla, the IMF's Georgieva doesn't think the day is nearing that the crypto will rival the dollar in stature.
"Look, this day, if it exists, is so far in the future that I think it is not very useful to talk about it. Why is the dollar today a dominant currency? Because of the size of the US economy and, most importantly, the depth of the capital markets in the US," Georgieva explained, comparing the dollar's attributes to other key global currencies.
"So I, for one, am not in a rush to turn my dollars into another currency. It doesn't mean that you shouldn't, you know, diversify. But, I wouldn't worry too much about [bitcoin rivaling the dollar]. There are things that make me lose sleep — that's not one of them."
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Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].
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