- JPMorgan, the largest bank in the United States, addressed spot Bitcoin ETFs in a new research report.
- The report emphasized that Bitcoin funds have not been able to attract investor interest since the second quarter of 2021.
- According to JPMorgan, the regulatory probability of approving one ETF is higher now, as it is assumed that previous concerns have been resolved in recent applications.
According to a new report by JPMorgan, the approval of a spot BTC ETF by the U.S. Securities and Exchange Commission (SEC) will not be a game-changer for the crypto markets.
JPMorgan’s Report on ETFs is Released
JPMorgan, the largest bank in the United States, stated in a research report that the approval of a spot Bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) would not be a game-changer for the crypto markets.
According to JPMorgan, although the SEC has not yet approved such an ETF, there is a higher probability of the regulator approving one in recent applications, assuming that previous concerns have been addressed. Analysts led by Nikolaos Panigirtzoglou stated:
“Spot Bitcoin ETFs have been around in Canada and Europe for a long time but have not managed to attract significant investor interest.”
Last month, units of BlackRock filed documents to create a spot Bitcoin ETF, leading to other asset managers such as Invesco and WisdomTree either applying or reapplying. The report highlighted that Bitcoin funds have failed to attract investor interest:
“Since the second quarter of 2021, Bitcoin funds, including both futures-based and physically backed ones, have failed to attract investor interest and have not benefited from the outflows seen from gold ETFs over the past year.”
While physically backed Bitcoin ETFs offer some advantages over futures-based funds, these are quite limited, as noted in the report. Spot ETFs provide a more direct and secure way to gain exposure to Bitcoin, eliminating the complexities around the custody and transfer of BTC and the underlying risk associated with futures-based products.
The report stated, “Spot ETFs have a higher probability of reflecting real-time supply and demand compared to futures-based ETFs and their approval in the U.S. would bring in more liquidity and increase price transparency in spot Bitcoin markets.”
