October 18, 2024
ETF approval may boost Bitcoin’s liquidity, but it won’t be a game changer — JPMorgan

Approval of a spot bitcoin exchange-traded fund (ETF) may not be a game-changer for the crypto market, although it could benefit the leading cryptocurrency, according to a report from JPMorgan managing director Nikolaos Panigirtzoglou.

Panigirtzoglou is based in London and is part of JPMorgan’s Global Markets Strategy team. He believes a U.S. bitcoin ETF will have a similar impact to Canada and Europe, where spot bitcoin ETFs have been around for some time.

According to reports seen Over the past two years, Bitcoin ETFs have generally attracted “little investor interest” in other jurisdictions, further “failing to benefit from investor outflows from gold ETFs,” according to Bloomberg.

The strategist also sees an advantage in having a bitcoin fund approved in the United States. Panigirtzoglou said the approval could bring more liquidity to the bitcoin market, but could also lead to a shift in trading activity away from bitcoin futures products.

Panigirtzoglou’s view differs from the high expectations surrounding the US approval of a bitcoin ETF. In a July 6 interview, BlackRock CEO Larry Fink said investors could turn to bitcoin as a hedge against inflation and fiat currency debasement.

“Let’s be clear: Bitcoin is an international asset,” Fink added, “and it’s not based on any one currency, so it can represent an asset that people can use as a substitute.” In the 12 months, the US annual inflation rate was 4.0%.

BlackRock’s continued success with ETFs has fueled optimism that its foray into a bitcoin ETF may also be successful.Only one of the 550 funds submitted by the firm has been approved, according to Eric Balchunas and James Seyffart of Bloomberg Intelligence. reject so far.

BlackRock’s filing followed a wave of resubmissions by the SEC, with backers including Invesco, Fidelity, WisdomTree and ARK Invest all awaiting regulatory approval. The SEC has rejected multiple applications in the past.

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