JPMorgan analysts have stated that they expect multiple spot Bitcoin exchange-traded fund (ETF) applications to be approved by the US Securities and Exchange Commission (SEC) in the near future.
Analysts led by Nikolaos Panigirtzoglou believe these approvals could happen “within months” and most likely before the January 10, 2024 deadline for applications for Ark Invest and 21Shares.
This optimism was fueled by the SEC's decision not to appeal a recent court decision in favor of Grayscale Investments. Last week, the SEC allowed the Grayscale case to expire on appeal, which the company had won in court the previous month.
Analysts noted that this development has led to “increased optimism for multiple spot bitcoin ETF approvals.” They also suggested that the SEC would be forced to approve spot BTC ETFs as a result of the court decision.
Grayscale Bitcoin Trust, currently the world's largest Bitcoin fund with assets under management (AUM) of $17.7 billion, is expected to face pressure to reduce product fees following the possible approval of a spot bitcoin ETF.
Analysts also predict that GBTC's discount to net asset value will likely disappear due to the share redemption/creation arbitrage mechanism in the ETF structure.
According to JPMorgan's report, eliminating this discount could provide investors with a benefit of $2 billion. Analysts also reiterated that the SEC is unlikely to provide a first-mover advantage to any spot BTC ETF applicants and will likely approve multiple ETFs at once.
*This is not investment advice.