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ETF approval may boost Bitcoinโ€™s liquidity, but it wonโ€™t be a game changer โ€” JPMorgan

July 7, 2023No Comments


A possible approval of a spot Bitcoin exchange-traded fund (ETF) will not be a game changer for crypto markets, although it could benefit the leading cryptocurrency, according to a report by JPMorgan managing director Nikolaos Panigirzoglou.

Based in London, Panigirtzoglou is part of JPMorgan's global market strategy team. He believes that a Bitcoin ETF in the United States would have a similar impact on markets to those seen in Canada in Europe, where spot Bitcoin ETFs have been around for some time.

According to the report seen Per Bloomberg, Bitcoin ETFs have generally โ€œattracted little investor interestโ€ in other jurisdictions over the past two years, furthermore โ€œdid not benefit from investor exits from gold ETFs.โ€

The strategist also sees the benefits of a Bitcoin fund getting the green light in the United States. According to Panigirtzoglou, an approval could bring more liquidity to the Bitcoin markets, but could also lead to a migration of trading activity from BTC futures products.

Panigirtzoglou's vision goes in a different direction than the high expectations surrounding the approval of a Bitcoin ETF in the United States. During an interview on July 6, BlackRock CEO Larry Fink, He suggested that investors could turn to Bitcoin as a hedge against inflation and the devaluation of fiat currencies.

"Let's be clear: Bitcoin is an international asset," Fink said, adding that it "is not based on any single currency, so it can represent an asset that people can play as an alternative." As reported by the Department of Labor, the annual inflation rate for the United States was 4.0% for the 12 months ending in May.

BlackRock's consistent success in filling ETFs has led to optimism that its bid for a Bitcoin ETF could also succeed. According According to data from Eric Balchunas and James Seyffart of Bloomberg Intelligence, only one of the 550 funds submitted by the company has been rejected to date.

BlackRock's application was followed by a wave of new filings with the Securities and Exchange Commission (SEC), with Investco, Fidelity, WisdomTree and Ark Invest among the online proponents for regulatory approval. The SEC has denied several requests in the past.

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