In a recent report published by JPMorgan analysts, doubts about the potential impact of a spot Bitcoin exchange-traded fund (ETF) approval on the cryptocurrency markets were raised. Despite the increasing buzz surrounding the possibility of a Bitcoin ETF being approved by the U.S. Securities and Exchange Commission (SEC), JPMorgan’s market strategists argue that similar products have already existed internationally without gaining significant popularity among investors. This article explores the viewpoints put forth by JPMorgan analysts and examines the factors contributing to their skepticism.

The Landscape of Bitcoin ETFs

Spot Bitcoin ETFs have been available in Canada and Europe for some time, but they have failed to attract substantial investor interest, according to JPMorgan analysts. The report highlights the existence of Canada’s Purpose Bitcoin ETF, which has been operational for two years without garnering significant attention. This observation raises questions about whether the approval of a spot Bitcoin ETF by the SEC would truly revolutionize the crypto markets, as some proponents have suggested.

While there was some initial enthusiasm surrounding the launch of BTC ETFs tied to derivatives, even these products failed to generate the level of institutional interest anticipated. JPMorgan’s analysts point out that both physically backed and futures-based Bitcoin funds have attracted little investor attention since the second quarter of 2021. This lack of interest has persisted despite the potential benefits of diverting investments from gold ETFs, which have seen outflows over the past year or so.

Existing Market Players

JPMorgan’s skepticism also arises from the presence of well-established market players in the cryptocurrency landscape. The recent launch of EDX, a cryptocurrency exchange backed by Charles Schwab, Citadel Securities, and Fidelity Digital Assets, has already created a ripple effect in Bitcoin prices. Additionally, other institutional giants, including Blackrock, have filed for spot Bitcoin ETFs. These factors lead JPMorgan analysts to question whether the approval of another ETF in the U.S. would significantly alter the market dynamics.

JPMorgan’s remarks coincide with a Wall Street Journal report suggesting that insider sources from the securities regulator have deemed certain ETF applications “inadequate.” This development led to several filings being resubmitted, with Coinbase named as a partner for the surveillance-sharing agreement (SSA). Notable firms such as Fidelity, Vaneck, Invesco, Wisdomtree, and Blackrock have all resubmitted their filings in response. However, Valkyrie, another applicant, refiled on July 3rd, indicating a persistent belief in the potential of Bitcoin ETFs.

The post JPMorgan Analysts: “Spot Bitcoin ETF Approval Is Unlikely to Be a Game Changer for Crypto Markets” appeared first on Crypto Academy.

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Filed under: Bitcoin - @ July 9, 2023 11:20 pm