- Bank notes that ETFs in other markets have not generated significant interest among investors
- The report describes three reasons why ETFs will not change the crypto market
A short time ago, JPMorgan, America’s largest bank, published a research report that writes that if the SEC approves a spot bitcoin ETF, it may not have much impact on the cryptocurrency market.
In the research report, JPMorgan writes:
“The approval of a spot bitcoin-ETF by the SEC will not change the cryptocurrency markets for a number of reasons.”
The bank gave three reasons that explain this position:
- Spot exchange-traded funds are already present in Canada and Europe. And there they failed to attract investor interest.
- Since the second quarter of 2021, futures and spot bitcoin-ETFs have not attracted much investor interest and failed to benefit from the outflow of funds from gold ETFs.
- The introduction of spot funds could lead to a migration of trading activity and liquidity from bitcoin futures markets to the US.
Spot bitcoin ETFs have little advantage compared to futures ones. They offer a more direct and reliable way to access BTC because they eliminate some of the complexities associated with direct storage and transfer, as well as the basis risk inherent in futures products. They can also better reflect supply and demand in real time, which helps increase liquidity and price transparency.