JPMorgan analysts led by Nikolaos Panigirtzoglou predict that the U.S. Securities and Exchange Commission (SEC) may be forced to approve multiple spot bitcoin exchange-traded funds (ETFs). The forecast comes after Grayscale scored a major legal victory against the SEC.
Last week, a federal court asked the SEC to re-examine Grayscale’s previous rejection of Grayscale’s application to convert its BTC Trust (GBTC) into a spot ETF. The court’s ruling was rooted in the SEC’s “arbitrary and capricious” stance, which failed to clarify how it would treat futures-based ETFs and spot-based bitcoin ETFs differently. The court emphasized that the SEC’s rejection lacked a solid basis, especially given the close correlation between the spot market and the CME futures market.
JPMorgan Chase Predicts Spot Bitcoin ETF Approval
Nicholas Panigirzoglu commented In a note, “The SEC would have to retroactively revoke its prior approval of a futures-based Bitcoin ETF to justify its rejection of Grayscale’s proposal. Such a move would be very damaging for the SEC.” And embarrassing.” He further added, “Given the current situation, it is more likely that the SEC will approve the pending spot bitcoin ETF applications of several asset managers, including Grayscale.”
Speculation was further fueled by the recent announcement by the US Securities and Exchange Commission (SEC) that it would delay a decision on spot ETFs for financial giants such as BlackRock, Fidelity and Invesco until mid-October. JPMorgan analysts interpreted the delay as a strategic move by the SEC to potentially approve multiple spot bitcoin ETF applications at the same time.
Not only would this approach eliminate any first-mover advantage, but it would also promote competition, which could lead to lower ETF fees. “It seems more likely that the SEC will be forced to approve the spot bitcoin ETF application that several asset managers, including Grayscale’s, are still waiting on,” Panigirtzoglou said.
It’s not all sunshine and rainbows, however. While the potential approval of a US spot ETF is an important milestone, JPMorgan analysts also sounded a warning. They emphasized that spot BTC spot ETFs have been operating for some time in regions such as Canada and Europe, but have yet to attract a large number of investors. The analyst further pointed out that “the outflow of funds from gold ETFs in the past year has not significantly benefited Bitcoin funds, including futures ETFs.”
A few days ago, Panigirtzoglou also predicted that the current sell-off may be drawing to a close as the open interest in the CME BTC futures contract has declined. He expects the cryptocurrency market to bottom out in the next few weeks and rebound in the second half of the year.
At press time, BTC is trading at $25,974.
Featured image via Pymnts.com, chart via TradingView.com
