Recently, giant financial companies started the cryptocurrency rally by filing spot Bitcoin ETF applications with the SEC.
According to the report of Coindesk, while the leading institutions and analysts of the industry stated that they expect these ETF applications to have a positive impact on the market, JP Morgan disagrees.
ETF applications, which started with BlackRock, continue with companies such as Fidelity and Invesco, while Bitcoin (BTC) and altcoins welcome this. However, banking giant JPMorgan stated that it believes the spot Bitcoin ETF filings will not have much impact in the crypto space.
Stating in their report that spot Bitcoin ETFs have existed outside the US for a while but failed to attract large investor attention, JP Morgan analysts led by Nikolaos Panigirtzoglou said the following about the reasons behind the thought that these ETFs will not have the expected positive impact:
“Spot bitcoin ETFs have been around for a while outside of the US, in Canada and Europe, but have failed to attract major investor interest.
Also, spot Bitcoin ETFs offer certain advantages over futures-based Bitcoin ETFs, but these advantages are relatively minor.”
While JP Morgan thinks spot Bitcoin ETFs will have no impact, he stated that the spot Bitcoin ETF will eventually replace the futures Bitcoin ETF.
Pointing out that spot ETFs are more likely to reflect real-time supply and demand than futures-based ETFs, analysts said that the approval of a spot Bitcoin ETF in the US will bring more liquidity and increase price transparency in its markets.
“Spot ETFs provide a simpler and safer way to invest in Bitcoin, removing the underlying risk-related complexities associated with custody, BTC transfer, and futures-based products.
However, Bitcoin ETFs, including futures ETFs, have generally received little investor interest since Q2 2021 and have also failed to benefit from investor exits from gold ETFs over the past year.”
*Not investment advice.