Spotlight: SEC Approve Crypto ETFs

On 10 January, the Securities and Exchange Commission (SEC) approved the first exchange-traded funds (ETFs) to track. The SEC is responsible for regulation of US securities markets and enforcing investor protection: the decision has been viewed as a landmark development as it opens up a means for US investors to invest in crypto assets through a regulated vehicle. The SEC has been keen to stress however the decision is not an endorsement or approval of bitcoin.
The announcement, however, was not without controversy given a supposed cyber-attack on the SEC account on social media platform X (formerly Twitter) where allegedly a false statement of approval was posted by hackers some 24 hours prior. This was dismissed as not being authenticated before the official confirmation by the SEC (of what could be described as a long-awaited approval announcement) was given some hours later.
The announcement has been the subject of increasing speculation that this day would inevitably arrive and will come as a notable win for advocates of crypto assets. The price of bitcoin (BTC) has also increased some 70% over the past couple of months to its current value partly as a result of speculation around the decision. The chart below (Source: Wall Street Journal) shows this sharp recent increase in price in the context of longer-term moves in bitcoin pricing.


Bitcoin is a high risk, unregulated investment. Capital is at risk and past performance is not a reliable indicator of future returns.

Over recent years, crypto assets such as Bitcoin have garnered a fervour of interest from DIY investors, many lured by online commentators promising impressive returns. However crypto assets remain speculative, volatile and extremely high-risk assets. As FCA consumer research has shown, many remain unaware of the risks and a large percentage have nursed significant losses. Despite the initial inroads from some regulators internationally over the last year, crypto assets remain largely unregulated. The FCA continues to warn UK investors that it is highly unlikely they will have access to any consumer protections should something go wrong. Investors should be prepared to lose all their money.
Because of these risks, since their inception crypto assets have been met by a healthy level of scepticism within the Wealth Management industry. atomos does not invest into crypto assets. This sentiment of scepticism was echoed by SEC chairman Gary Gensler, who reiterated that although approved, the Bitcoin ETFs were by no means endorsed and urged investors to remain cautious. Despite the risks of investing in crypto assets, this is certainly an interesting development for the future of crypto investments.

The Noise

  • The last US inflation reading of the year came in at 3.4% year-on-year for overall consumer price inflation for December, up from 3.1% the month before. But looking at core CPI (excluding volatile food and energy costs) the speed of cost increases fell further to 3.9% from 4%, pointing to ongoing moderation in underlying price pressures. The latest labour market data published this week showed continued signs of strength, the combination of this with the inflation data did very little to move markets. From a Federal Reserve point of view, the latest inflation data was not the clear outcome some officials were looking for as final pieces of evidence that inflation had dissipated to the degree that they could begin easing monetary policy.

  • Britain’s economy grew slightly more than expected in November, expanding by 0.3% following a fall of 0.3% the month before. Despite the positive month-on-month growth, GDP shrank 0.2% in the 3 months to the end of November leaving the UK at risk of a technical recession (two consecutive quarters of negative GDP growth) should the economy fail to grow in December. The UK economy struggled to gain momentum in 2023 as rapid inflation and the highest interest rates in 15 years impacted households, though economists see scope for a pick-up in growth as inflation slows and the Bank of England cut rates in 2024. Sterling weakened slightly against the US dollar following the data release.

  • The Norwegian parliament has voted in favour of allowing Arctic seabed mineral exploration this week, with hopes to become the first country to make deep-sea mining a reality on a commercial scale. The decision did not come without opposition, as environmental campaigners raised concerns over the environmental impact of deep-sea mining and the UN watchdog called for a moratorium. No timeline has been set on when exploration could begin, but the plan is to start awarding companies exclusive rights to exploration and potential extraction from specific areas after an application process. The final version of the government’s proposal sets out stricter environmental survey requirements during the exploration phase than initially presented.

The Numbers

GBP Performance to 12/01/2024

Equity GBP Total Return

1 Week








MSCI Europe






MSCI Japan



MSCI Asia Pacific ex Japan



MSCI Emerging Market






Fixed Income GBP Total Return


UK Government



Global Aggregate GBP Hedged



Global Treasury GBP Hedged



Global IG GBP Hedged



Global High Yield GBP Hedged



Currency moves












Commodities GBP return









Source: Bloomberg, data as at 12/01/2024

The Nuance

Looking back on 2023, the prevailing view for the US economy was one of slowing growth and possibly even a recession. In reality, the macroeconomic outcomes in 2023 were better than expected. US consumption was robust through the year, supported by a historically low unemployment rate and strong wage growth. All of this was despite the aggressive monetary tightening campaign carried out by the Federal Reserve over the last 18 or so months. Inflation has moderated quite noticeably but remains above the central bank target rate of 2%.

Heading into 2024, labour demand and supply has rebalanced somewhat, but unemployment remains historically low with wage growth still robust. Strong GDP growth through 2023 contrasted with other economies such as the eurozone and the UK, which have both struggled with growth at the back end of 2023. The Federal Reserve signalled at the end of 2023 that its policy interest rate has peaked, with investors pricing in several rate cuts through 2024. The path back to balance is still uncertain, though we see it less likely to be as smooth as others are anticipating.

Taking a brief look at the UK, The Bank of England is likely to face a more difficult trade-off between growth and inflation than the US Federal Reserve is. Macro volatility is likely to persist into 2024 with elevated risks of monetary policy error, those risks being not bringing inflation down fast enough or constraining growth too much.

All investment views are presented for information only and are not a personal recommendation to buy or sell. Past performance is not a reliable indicator of future returns, investing involves risk and the value of investments, and the income from them, may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.

Any views expressed are based on information received from a variety of sources which we believe to be reliable, but are not guaranteed as to accuracy or completeness by atomos. Any expressions of opinion are subject to change without notice.

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