JPMorgan released a research report on Thursday stating that the approval of a spot bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) will not have a transformative impact on the crypto markets due to several factors.
The report highlights the lack of significant investor interest in similar ETFs that have been available in Canada and Europe for some time.
Not groundbreaking
The anticipation surrounding the approval of a spot bitcoin exchange-traded fund (ETF) in the United States continues to grow among enthusiasts. However, JPMorgan, a leading financial institution, suggests that the approval might not have the groundbreaking effect on the crypto market that many expect.
According to JPMorgan strategists, headed by Nikolaos Panigirtzoglou, the potential approval of physically backed bitcoin ETFs by the Securities and Exchange Commission (SEC) is unlikely to be a game changer for the crypto markets, Business Insider reported. The report outlines several factors that have led to JPMorgan’s skepticism regarding the expected impact.
One of the factors highlighted by the report is the existence of spot bitcoin ETFs in Canada and Europe for a considerable period. Despite their availability, these ETFs have failed to attract significant investor interest. Furthermore, JPMorgan’s analysts pointed out that even the outflows from gold ETFs in the past year have not translated into overall benefits for bitcoin funds, including futures ETFs.
The report suggests that the historical performance of bitcoin ETFs in other regions and the lack of substantial correlation between gold and bitcoin investment flows raise doubts about the potential transformative effect of a spot bitcoin ETF approval in the United States. JPMorgan’s analysis underscores the need to consider various factors beyond regulatory approval when assessing the overall impact on the crypto market.
Spurring on other asset managers
The filing of paperwork by a BlackRock unit last month to establish a spot bitcoin exchange-traded fund (ETF) has spurred other asset managers, including Invesco and Wisdom Tree, to either apply or reapply for similar offerings. On July 6, comments from Larry Fink, the CEO of BlackRock, continued to spur on bitcoin prices as the cryptocurrency hit a 13-month high. Unfortunately, this was later superseded by worries about interest rates in the United States which sent the coin back down once again.
Following the release of the JP Morgan report, the price of bitcoin (BTC) remains steady, with a 0.12% decrease in the last 24 hours, where it currently sits at 30,193, according to CoinMarketCap data.
