1 year ago
Global concern slope JPMorgan has cautioned that the support of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) could “put terrible downward unit connected bitcoin prices.” The bank’s analysts estimation that billions of dollars could exit the crypto marketplace aft Grayscale Investments converts its bitcoin spot (GBTC) into a spot bitcoin ETF.
Market Impact of Spot Bitcoin ETFs
JPMorgan expert Nikolaos Panigirtzoglou shared his predictions of the imaginable interaction connected the terms of bitcoin from the U.S. Securities and Exchange Commission (SEC) approving spot bitcoin exchange-traded funds (ETFs) successful a Linkedin station connected Friday.
While emphasizing his content successful the imminent support of spot bitcoin ETFs by the SEC, helium cautioned that lawsuit discussions are centered connected the imaginable superior outflow from the Grayscale Bitcoin Trust (GBTC) arsenic it transitions into a bitcoin ETF.
“The statement being that a important magnitude of GBTC shares has been bought successful the secondary marketplace this twelvemonth astatine heavy discounts to NAV successful anticipation of its conversion to ETF and these speculative investors would instrumentality nett erstwhile GBTC gets converted to an ETF and the discount to NAV gets arbitraged away,” Panigirtzoglou explained. “We estimation that astir $2.7bn could travel retired of GBTC.” The JPMorgan predicted:
In presumption of marketplace impact, if this $2.7bn exits wholly the bitcoin abstraction past specified an outflow would of people enactment terrible downward unit connected bitcoin prices.
“If alternatively astir of this $2.7bn shifts into different bitcoin instruments specified arsenic the recently created spot bitcoin ETFs station SEC approval, which is our champion guess, past immoderate antagonistic marketplace interaction would beryllium much modest. Nevertheless, the equilibrium of risks for bitcoin prices is skewed to the downside successful our sentiment arsenic immoderate of this $2.7bn is apt to wholly exit the bitcoin space,” the expert continued.
“Significantly much wealth than the supra $2.7bn could exit GBTC if its interest (currently astatine 200bp) is not lowered sharply station ETF conversion towards our estimated scope of the equilibrium interest of astir 50-80bp,” helium cautioned.
A Shift Towards Regulated Crypto Entities
Panigirtzoglou besides shared his investigation of the interaction connected the crypto manufacture of the Binance colony with the U.S. Department of Justice (DOJ), the Treasury, and different national agencies.
“The Binance colony is reinforcing an ongoing displacement towards regulated crypto entities and instruments which has been the nonsubjective of U.S. authorities station FTX collapse,” helium said, elaborating:
Such a displacement towards regulated crypto entities and instruments should beryllium affirmative for the crypto ecosystem arsenic much regularisation volition assistance pull the involvement of accepted marketplace participants and investors.
“Indeed, the information of large accepted plus managers specified arsenic Blackrock and Fidelity successful the forthcoming support of carnal oregon spot bitcoin ETFs by the SEC is accordant with this thesis,” the JPMorgan expert added.
Do you hold with JPMorgan’s investigation connected the terms interaction of spot bitcoin ETFs? Let america cognize successful the comments conception below.
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