The Securities and Exchange Commission accepted plans for 11 ETFs to list on leading exchanges, including the New York Stock Exchange, "on an accelerated basis," according to a 22-page ruling.
Exchange-traded funds are exchanged on public markets, allowing investors to gain exposure to asset price changes without directly owning the underlying assets.
However, the funds do make investments in digital currencies.
The approval of the ETFs, which are comparable to stocks or mutual funds in terms of accessibility to ordinary investors, "represents a pivotal juncture for the digital asset space, signifying a movement towards mainstream legitimacy and acceptance," said Thomas Tang, vice president of investments at Ryze Labs.
"This development comes after years of regulatory scrutiny and market volatility, marking a notable shift in the perception and utilization of digital currencies," he said.
"Bitcoin ETFs, by virtue of their existence within a regulated framework, will infuse a level of institutional credibility into the realm of digital assets."
ETFs, which were first introduced in the 1990s, gained popularity in the early 2000s as investors sought a simple and low-cost option to wager on stock indices, commodities, or a specific industrial sector.
According to firm Oliver Wyman, ETFs held around $6.7 trillion globally at the end of 2022.
Until Wednesday, people who wanted to invest in bitcoin had to register an account on a cryptocurrency exchange and deal using a traditional medium of exchange, such as the dollar.
Wednesday's action allows for trading on vehicles issued by major financial institutions such as Fidelity and BlackRock.