JPMorgan Anticipates Bitcoin ETF Approvals
According to JPMorgan analysts, the recent legal victory by Grayscale against the SEC is expected to prompt the approval of multiple spot Bitcoin ETF applications.
This development stems from the implication that the SEC may need to withdraw its prior approval of futures-based Bitcoin ETFs to justify denying Grayscale’s proposal to convert its Bitcoin trust into an ETF.
However, such a move by the SEC is deemed disruptive and unlikely. Therefore, it’s more likely that the SEC will be compelled to approve pending spot Bitcoin ETF applications from various asset managers, including Grayscale.
A federal court recently ruled that the SEC must reevaluate its rejection of Grayscale’s bid to transform the Grayscale Bitcoin Trust (GBTC) into an ETF, citing an unjustified distinction between futures and spot Bitcoin products.
The court’s decision was based on the similar risk of fraud and manipulation in both markets due to their tight correlation. The SEC’s rejection was deemed “arbitrary and capricious” due to the lack of a coherent rationale for differing treatment.
In response, the SEC has delayed decisions on spot Bitcoin ETFs proposed by firms like BlackRock, Fidelity, and Invesco until at least mid-October.
JPMorgan analysts suggest that this delay hints at the possibility of simultaneous approvals for multiple spot Bitcoin ETFs, promoting competition in ETF fees. If Grayscale’s trust is granted conversion into the largest Bitcoin spot ETF globally, it may face heightened pressure to lower its fees.
However, analysts caution that while this victory is significant, spot Bitcoin ETFs may not be a game-changer for the cryptocurrency market, given their modest advantages over futures ETFs.