In a report published on Thursday, JPMorgan analysts suggest that the approval of a spot bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) is “unlikely to be a game changer for crypto markets.” The market strategists at the American banking giant emphasize that similar spot bitcoin ETFs already exist internationally, but they have not gained much popularity among investors.
JPMorgan Analysts Doubt Impact of Spot Bitcoin ETF Approval on Crypto Markets
Over the past few weeks, there has been substantial discussion among bitcoin proponents regarding the potential approval of a spot bitcoin (BTC) exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). In mid-June, Blackrock, the world’s largest asset manager, filed for a spot bitcoin ETF. Following this registration, numerous other institutions submitted applications for comparable exchange-traded products.
According to market observers, the recent launch of EDX, a cryptocurrency exchange supported by Charles Schwab, Citadel Securities, and Fidelity Digital Assets, coupled with the filings for ETFs, has resulted in an increase in BTC prices. JPMorgan analysts, in a report published on Thursday, express doubt about the transformative impact of a spot bitcoin ETF on the crypto markets, however, even if it receives approval from the SEC.
“The potential approval of physically backed bitcoin ETFs by the SEC is unlikely to be a game changer for crypto markets,” the analysts said. “Spot bitcoin ETFs have existed for some time outside the U.S., in Canada and Europe, but have failed to attract large investor interest.” The bank’s market strategists noted that Canada’s Purpose Bitcoin ETF (BTCC CN) has been around for two years without much attention.
While there was some initial upside following the launch of derivatives-related BTC ETFs, even exchange-traded products based on futures are not generating the institutional interest they previously attracted. The JPMorgan analysts explained, “Bitcoin funds overall, including futures-based and physically backed funds, have attracted little investor interest since Q2 2021, also failing to benefit from investor outflows from gold ETFs over the past year or so.”
JPMorgan’s remarks come in the wake of a recent Wall Street Journal report, which indicated that insiders with knowledge of the securities regulator informed Cboe and Nasdaq, the listing applicants, that their applications were deemed “inadequate.” Subsequently, following the report, several ETF filings were resubmitted, with Coinbase being named as the partner for the surveillance-sharing agreement (SSA). Fidelity, Vaneck, Invesco, Wisdomtree, and Blackrock resubmitted their filings at the end of June, while Valkyrie refiled on July 3rd.
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