JPMorgan Says Bitcoin ETFs will not Revolutionize Crypto
The latest report published by JPMorgan has shed some light on the current conditions and expectations from the cryptocurrency markets. The report maintains that approval of Bitcoin spot ETF is not going to have a significantly positive impact on the crypto market.
At the same time, the report has acknowledged certain benefits that are associated with Bitcoin spot ETFs in comparison to its futures-tracking counterparts. The report in question was published by JPMorgan Chase and Co on Thursday.
This report was alluding to the recent rising interest in BlackRock and other major financial players in Bitcoin. The largest asset management company in the world has reportedly filed and re-filed for a Bitcoin ETF after getting turned down by SEC officials.
At the same time, JPMorgan has maintained that Bitcoin ETF approval might also have little impact on increasing the trading interest in the flagship cryptocurrency. The data added to the report suggests that there is considerably conservative interest in Bitcoin spot ETF investing.
US Crypto Investors are not Eager to Invest in Bitcoin ETFs, Says JPMorgan
JPMorgan Chase report has stipulated that crypto investors have been able to access Bitcoin spot ETF in foreign territories such as Canada and Europe. However, the report asserts that American investors have not taken up a substantial amount of positions in the spot product for Bitcoin.
Additionally, the report has also asserted that since 2021 the overall market size of futures and spot Bitcoin ETFs has remained considerably smaller.
Another observation added in the report suggests that Bitcoin funds have not shown signs of capturing the liquidated funds from gold ETFs. According to a JPMorgan report, Gold has maintained its position as a classic store of value over the years that have seen increased investment interest during turbulent times.
Thus, the report concludes that the fact that gold-ETF outflows did not translate into Bitcoin ETF inflows means that investors have considered other investment options.
This report has also conducted an experimental comparative analysis of Bitcoin spot and futures ETFs. The results of the analysis have concluded that Bitcoin spot ETFs offer greater advantages to the investors in terms of direct price tracking of the underlying asset class.
At the same time, the report has highlighted some issues that are related to the custody and transference of Bitcoins with futures ETFs that their spot alternatives remove.
At the same time, spot ETFs track the supply and demand changes in Bitcoin in real time improving price transparency and securing liquidity. The bank also maintained that in case a spot Bitcoin ETF application is approved by SEC, it can lead to a substantial transfer of positions from futures to spot ETFs.
At the same time, the report maintained the coexistence of futures and spot ETFs for Bitcoin is probable granted that they both cater to different use cases for different trading strategists.
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