By George Ward
A Bloomberg report quoting the asset management firm disclosed that the imminent approval of spot Bitcoin ETF by the US Securities and Exchange Commission (SEC) would bolster the asset’s liquidity. However, JPMorgan noted that the endorsement of a similar product in Canada and Europe has failed to attract institutional investors.
Low Investor Interest In Bitcoin ETF
According to a recent report released by JPMorgan’s managing director Nikolaos Panigirtzoglou, the potential approval of a Bitcoin exchange-traded fund (ETF) may not completely revolutionize the crypto markets. However, it could bring advantages to Bitcoin, being the dominant crypto asset.
A JPMorgan’s global market strategy team member, Panigirtzoglou, believes that introducing a Bitcoin ETF in the United States would yield similar effects to those observed in Canada and Europe. Authorities in those regions have approved a similar product for a considerable period.
As indicated in the report cited by Bloomberg, Bitcoin ETFs have generally witnessed minimal enthusiasm from investors across various jurisdictions in the past few years. Moreover, these ETFs have not been able to capitalize on the outflows experienced by gold ETFs, which could have boosted their appeal among investors.
Despite the potential benefits Bitcoin ETFs offer, such as increased accessibility and exposure to the crypto market, their performance has failed to garner significant investor attention. Hence, many doubt their overall impact on the investment landscape.
Nevertheless, the Bloomberg strategist is optimistic that approving a Bitcoin fund in the United States could benefit the asset. Notably, it could enhance liquidity in the Bitcoin markets.
However, he also highlighted the possibility of a shift in investment activity, as investors may divert their attention from BTC futures products towards the newly approved Bitcoin fund.
Contrary Opinions
Meanwhile, Panigirtzoglou’s sentiment does not align with the prevailing optimism surrounding the potential approval of a Bitcoin ETF in the United States. In a recent discussion, Larry Fink, the CEO of BlackRock, presented an alternative viewpoint.
He proposed that investors consider Bitcoin as a haven against inflation and the gradual erosion of the value of fiat currencies. According to Fink, Bitcoin is a global asset that goes beyond reliance on any single currency, making it a viable alternative for individuals seeking diversified investment options.
Fink’s position is supported by the recent data from the Labor Department, which reveals that the US experienced an annual inflation rate of 4.0% for the 12 months ending in May. The world’s leading investment manager has established a remarkable track record of successfully launching and managing ETFs, fostering optimism surrounding its potential foray into the crypto ETF space.
Eric Balchunas and James Seyffart, analysts at Bloomberg Intelligence, reveal a remarkable statistic about BlackRock’s history of ETF filings. Out of the asset manager’s extensive portfolio of 550 funds that it has filed thus far, only a single ETF has been rejected.
Following BlackRock’s initial application, there has been a flurry of refilings with the SEC by other investment platforms. Their moves indicate a growing interest and participation from prominent players in the financial industry.
ARK Invest, Invesco, Fidelity, and WisdomTree, are among those that have recently re-submitted their applications. They are also seeking regulatory approval for their respective Bitcoin ETF proposals.
Meanwhile, the US regulator has declined several applications for Bitcoin ETF approvals in the past few years.