In a recent report, financial behemoth JP Morgan declared that a spot Bitcoin(BTC) ETF’s approval by the Securities and Exchange Commission (SEC) might not cause substantial change in the crypto asset’s price or adoption. While the crypto fraternity commends the impending accomplishment by some firms, it’s suggested that the move might bear a few complications tucked within its sleeves.
The study led by Nikolaos Panigirtzoglou highlights that spot BTC ETFs’ approval in other regions hasn’t proven to be a game-changer for the asset, even amidst bear markets. The notion is backed by the lack of widespread interest from institutional investors in regions like Europe and Canada despite the presence of spot Bitcoin ETFs.
The rather lackluster performance of other Bitcoin products, such as future-backed markets, is noted as a crucial reason behind these projections. As per the report, these products garnered substantially less investor interest from Q2 2021 onwards. Thus, questioning the popular opinion that the advent of spot ETFs would work wonders for Bitcoin adoption.
Yet, the paper mentions how spot BTC ETFs hold a slight upper hand over future-based products. This edge stems from their potential in directing liquidity away from future markets, leading to their direct replacement without growth. Because ETFs reflect the prevalent demand and supply, their approval could increase transparency in the spot market. Nevertheless, the impact might be less dramatic than some believe.
The echoes of a Bitcoin spot ETF were brought about by BlackRock’s submission in June 2023. The platform has garnered faith from the crypto community due to its past successful dealings with the SEC. The Commission repeatedly rejected previous applications for a spot BTC ETF in the US from several notable firms. But growing optimism stems from the possibility of a breakthrough application meeting the stringent standards of the Commission.
In the wake of BlackRock’s submission, multiple companies, including WisdomTree, Invesco, and Valkyrie, followed suit. These companies have made numerous improvements to their applications, positioning them favorably in their bid for approval. Hence, re-filing the application, as done by BlackRock and other firms, could give them an edge as they have now met all known criteria and await approval.
Propelled by the prospective approval of the spot ETF, BTC’s price soared above $31,000, with ardent advocates predicting further escalation in the upcoming weeks. Yet, the manifestation of this promised growth remains to be seen, adding yet another chapter to the crypto narrative’s unpredictable saga.
Source: Cryptonews
