A report by JPMorgan managing director Nikolaos Panigirtzoglou suggests that the possible approval of a spot Bitcoin exchange-traded fund (ETF) in the United States won’t have a significant impact on the crypto markets, although it could benefit the leading cryptocurrency. Based in London, Panigirtzoglou is part of JPMorgan’s global market strategy team. He believes that a Bitcoin ETF in the United States would have a similar impact as those seen in Canada and Europe, where spot Bitcoin ETFs have been available for some time.
However, according to the report seen by Bloomberg, Bitcoin ETFs have generally attracted little investor interest in other jurisdictions over the past two years. They have also failed to benefit from investor outflows from gold ETFs. Despite this, Panigirtzoglou sees the potential benefits of a Bitcoin ETF receiving approval in the United States. He believes it could bring more liquidity to Bitcoin markets and potentially lead to a migration of trading activity from BTC futures products.
Panigirtzoglou’s view differs from the high expectations surrounding the potential approval of a Bitcoin ETF in the United States. BlackRock’s CEO, Larry Fink, recently suggested in an interview that investors could turn to Bitcoin as a hedge against inflation and the devaluation of fiat currencies. Fink stated that Bitcoin is an international asset not based on any one currency, making it an alternative asset for people to consider. This comes amid an annual inflation rate of 4.0% for the U.S. as reported by the Labor Department for the 12 months ending in May.
BlackRock’s successful track record in filling ETFs has led to optimism that its application for a Bitcoin ETF might also succeed. Data from Bloomberg Intelligence shows that only one of the 550 funds filed by the company has been rejected to date. Following BlackRock’s application, other companies such as Invesco, Fidelity, WisdomTree, and ARK Invest have also filed for Bitcoin ETFs and are awaiting regulatory approval.
It is worth noting that the Securities and Exchange Commission (SEC) has denied several Bitcoin ETF applications in the past. However, the trend of prominent asset management firms and financial institutions entering the crypto space has created hope for the approval of an ETF.
In conclusion, while a spot Bitcoin ETF may not be a game changer for the crypto markets, it could have beneficial effects for Bitcoin and its liquidity. The approval of a Bitcoin ETF in the United States could potentially attract more investors and lead to a shift in trading activity. However, the overall impact may not be as significant as some might anticipate.