In a recent report by JPMorgan’s managing director, Nikolaos Panigirtzoglou, it is suggested that the approval of a spot Bitcoin exchange-traded fund (ETF) in the United States may not be a game changer for the crypto markets, although it could have some positive implications for the leading cryptocurrency. This perspective is based on the observation that spot Bitcoin ETFs in Canada and Europe have not attracted significant investor interest.
Panigirtzoglou notes that Bitcoin ETFs in other jurisdictions have overall failed to benefit from investor outflows from gold ETFs and have not generated substantial interest over the past two years. However, he acknowledges that the approval of a Bitcoin ETF in the US could enhance liquidity in the Bitcoin markets. On the flip side, it might also lead to a migration of trading activity from Bitcoin futures products.
This view contrasts with the high expectations surrounding a potential Bitcoin ETF approval in the United States, as expressed by BlackRock’s CEO, Larry Fink. Fink suggested that investors could turn to Bitcoin as a hedge against inflation and currency devaluation, emphasizing Bitcoin’s international nature and its potential as an alternative asset.
BlackRock’s track record of successfully filling ETFs has fueled optimism that its attempt at a Bitcoin ETF could also meet with success. Data from Bloomberg Intelligence reveals that out of 550 funds filed by BlackRock, only one has been rejected thus far. Following BlackRock’s application, other prominent firms such as Investco, Fidelity, WisdomTree, and Ark Invest submitted their own filings for regulatory approval, anticipating a favorable outcome. It is worth noting that the SEC has previously denied several applications for Bitcoin ETFs.
Overall, while the approval of a spot Bitcoin ETF in the United States may not bring drastic changes to the crypto markets, it could contribute to increased liquidity for Bitcoin. The contrasting views among industry experts highlight the ongoing debate surrounding the potential impact and significance of a Bitcoin ETF.