JP Morgan casts doubt on the possible effects of a spot BTC ETF
Financial giant JP Morgan believes that the approval of a spot Bitcoin (BTC) ETF by the Securities and Exchange Commission (SEC) will not significantly affect the price and adoption of the asset.
In a new report, the bank opined that while the community praises the remarkable progress made by companies on the cusp of a historic achievement, it may have its downsides in other areas.
Analysts at the institution led by Nikolaos Panigirtzoglou explained that spot BTC ETFs have been approved in other jurisdictions without being a game changer for the asset, even during bear markets.
“Detect bitcoin ETFs [have] It existed for some time outside the US, in Canada and Europe, but it failed to attract the interest of big investors.”
The report cited the underperformance of other Bitcoin products, particularly futures-backed markets, as a major reason for its predictions.
“Bitcoin funds in general, including physically backed and futures-based funds, have attracted little investor interest since Q2 2021, and have also not benefited from investor outflows from gold ETFs. over the last year or so.” says the report.
Based on the analysis, spot BTC ETFs would be better than future based However, for the market, the difference could be minimal and less exaggerated than some observers have pointed out.
The approval of a spot BTC ETF could cause traders and investors to shift the liquidity of the futures markets, leading to a drop-in replacement without the necessary growth.
This is due to the advantages of real time, as it is affected by the current supply and demand. Many also believe that the approval of spot ETFs would increase transparency in the spot market.
Benchmark ETF now in sight
The new wave of a Bitcoin spot ETF was sparked by BlackRock’s application in June 2023. He is considered by many to be the real deal after his previous successes with the SEC.
Notably, the Commission had rejected all previous applications for a spot BTC ETF in the US despite numerous requests from leading companies.
According to the report, there is growing optimism about the prospects of an application scaling the hammer of the Commission.
Several apps were introduced by firms that followed BlackRock, including WisdomTree, Invesco, Valkyrie, etc., with various enhancements added.
JP Morgan noted that the resubmission of the application by BlackRock and other firms gives them an advantage as they have now checked all the known boxes and await future approval.
The buzz around the ETF spot it shot itself BTC price above $31,000 and bulls are predicting a much higher price in the coming weeks.