The number of applications for a Bitcoin ETF has multiplied in recent weeks. This development, initiated by the asset management company BlackRock, could affect the cryptocurrency market, according to several analysts. Investment bank JPMorgan Chase considers this prospect unlikely.
JPMorgan says Bitcoin ETF approval won't have impact on cryptocurrencies
Will the SEC finally approve the launch of the first Bitcoin exchange-traded fund? Some analysts have put the chance of this happening at 50%. But even if the regulator approves one of the many requests it has received, the cryptocurrency market won’t be affected.
This opinion comes from investment bank JPMorgan. On Friday, July 7, the American financial group expressed its position on the speculation surrounding this issue. In fact, his argument is that the realization of this prospect could disappoint the cryptocurrency market.
“SEC approval of a physically-backed Bitcoin ETF is unlikely to be a game-changer for the cryptocurrency market,” JPMorgan said in a report.
The opinions of financial institutions are based on a number of factors. The first is the attractiveness of Bitcoin ETFs. For example, despite their presence in Canadian and European financial markets, they have attracted little interest from investors.
The dynamics of gold-related ETFs seem to confirm this trend. These projects suffered a large outflow of funds last year. JPMorgan said that this situation did not benefit Bitcoin funds or even futures ETFs.
The second factor Bank of America mentions concerns the profitability of ETFs. Overall, JPMorgan notes, this is not a big deal. This is despite the fact that spot Bitcoin ETFs offer advantages over ETFs based on futures contracts.
Unlike the latter, a spot Bitcoin ETF facilitates investors’ exposure to Bitcoin by limiting the restrictions associated with futures contract ETFs, particularly those related to the custody and transfer of cryptocurrencies.