Increased confidence surrounding the potential approval of several spot bitcoin exchange-traded funds (ETFs) helped Bitcoin (BTC) this week, according to a research study released Wednesday by JPMorgan (JPM).
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Possible BTC ETF Acceptance
According to the source, acceptance of the applications is closer due to the Securities and Exchange Commission's (SEC) choice not to appeal the recent decision in the Grayscale case.
Grayscale Bitcoin Trust (GBTC), the world's most important cryptocurrency trust, is managed by Grayscale. The research study also highlighted that the potential approval of spot bitcoin ETFs could lead to increased institutional investment in bitcoin.
This could further boost the cryptocurrency's price and market stability as more traditional investors gain exposure to the digital asset through regulated channels.
Expert Report and Forecasts
JPMorgan's report suggested that the SEC's decision not to appeal the Grayscale decision shows the growing acceptance and understanding of cryptocurrencies by the regulatory body.
According to experts led by Nikolaos Panigirtzoglou, the approval should take place within a few months, probably before January 10, the last day for Ark 21Shares applications.
How can ETFs benefit the market?
ETFs track the performance of an underlying asset and are traded on an exchange like stocks. They are very popular as they give investors access to cryptocurrencies without requiring them to purchase the underlying digital assets. In addition, marketing them costs less.
Acceptance of a spot bitcoin ETF will bring capital to the cryptocurrency market.
What JPMorgan thinks
The bank reiterated its belief that the regulator was more likely to accept multiple applications at once than to give any applicant a "first mover advantage".
According to JPMorgan, such a change may benefit investors as it would promote competition on ETF costs.
If the trust's conversion to an ETF is approved, Grayscale "will likely come under greater pressure to reduce fees," the study said.
Lowering fees will make the ETF more attractive to investors and align with the trend of lower management fees in the overall ETF industry. This could further drive competition among other cryptocurrency investment trusts to lower their fees, ultimately benefiting investors with more affordable options. Additionally, the pressure to lower fees may prompt Grayscale to explore new strategies and partnerships to improve its offerings and remain competitive in the evolving cryptocurrency market.