Thursday, February 29, 2024

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

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A potential approval of a spot Bitcoin exchange-traded fund (ETF) received’t be a recreation changer for crypto markets, though it’d profit the main cryptocurrency, in line with a report by JPMorgan managing director Nikolaos Panigirtzoglou.

Primarily based in London, Panigirtzoglou is a part of JPMorgan’s world market technique crew. He believes {that a} Bitcoin (BTC) ETF in america would have an identical impression as these seen in Canada and Europe, the place spot Bitcoin ETFs have been round for a while.

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Based on the report seen by Bloomberg, Bitcoin ETFs have total “attracted little investor curiosity” in different jurisdictions previously two years, additional “failing to learn from investor outflows from gold ETFs.”

The strategist additionally sees the advantages of a Bitcoin fund receiving the inexperienced mild in America. Based on Panigirtzoglou, an approval might convey extra liquidity to Bitcoin markets however might additionally result in a migration of buying and selling exercise from BTC futures merchandise.

Panigirtzoglou’s view goes in a distinct route from the excessive expectations that encompass an approval of a Bitcoin ETF in america. Throughout an interview on July 6, BlackRock’s CEO, Larry Fink, suggested that buyers might flip to Bitcoin as a hedge in opposition to inflation and the devaluation of fiat currencies.

“Let’s be clear: Bitcoin is a global asset,” stated Fink, including, “It’s not based mostly on anybody foreign money, and so it may possibly symbolize an asset that individuals can play in its place.” As reported by the Labor Division, the annual inflation fee for the U.S. was 4.0% for the 12 months ending in Could.

BlackRock’s constant success in filling ETFs has led to optimism that its attempt for a Bitcoin ETF may additionally succeed. Based on information from Eric Balchunas and James Seyffart at Bloomberg Intelligence, solely considered one of 550 funds filed by the corporate has been rejected up to now.

BlackRock’s software was adopted by a wave of refilings with the Securities and Change Fee (SEC), with Invesco, Constancy, WisdomTree and ARK Make investments among the many proponents in line for regulatory approval. A number of functions have been denied by the SEC previously.

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