US to decide if Bitcoin investment product is legal. Here's why it matters

Bitcoin ETFs could bring a flood of investments but also pose risks.

The price of Bitcoin vaulted skyward on Tuesday afternoon after the Securities and Exchange Commission appeared to deliver a major breakthrough for the cryptocurrency in a post on X.

Minutes later, SEC Chair Gary Gensler punctured the euphoria, saying on X that a hacker had commandeered the agency's account and sent out a fake message. The price of Bitcoin plummeted.

The frenzy swirled around a long-awaited approval for a trading product called a Bitcoin Exchange-Traded Fund (ETF), which some analysts say could bring tens of billions of dollars of investment this year and catapult the price of Bitcoin.

On Wednesday, the SEC faces a deadline to decide whether Bitcoin ETFs are legal.

A Bitcoin ETF would allow investors to buy into an asset that tracks the price movement of Bitcoin, while avoiding the inconvenience and risk of purchasing the crypto coin itself. But critics warn the investment product could do harm to investors exposed to the volatility and uncertainty of crypto.