ETF Approval Could Increase Bitcoin Liquidity, But Won’t Be a Game Changer – JP Morgan

According to a report by JP Morgan Managing Director Nikolaos Panigartzoglu, the 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.

Based in London, Panigiratzoglu is part of JP Morgan’s global markets strategy team. He believes that a bitcoin ETF in the United States will have a similar impact on the markets as in Canada in Europe, where spot bitcoin ETFs have existed for some time.

according to the report saw According to Bloomberg, bitcoin ETFs have overall “attracted less investor interest” in other jurisdictions over the past two years, in addition to “failing to benefit from investor outflows from gold ETFs.”

Strategists also see benefits for bitcoin funds getting the green light in the US. According to Panigirtzoglu, an approval could bring more liquidity to the bitcoin markets, but could also lead to a shift of trading activity away from BTC futures products.

Panigirtzoglu’s approach goes in a different direction from the high expectations associated with the approval of a bitcoin ETF in the United States. During an interview on July 6, BlackRock CEO Larry Fink suggested that investors may turn to bitcoin to hedge against inflation and the devaluation of fiat currencies.

“Let’s be clear: Bitcoin is an international asset,” Fink said, “that it is not based on any one currency, and therefore may represent an asset that people can play as an alternative.” The United States had an annual inflation rate of 4.0% for the 12 months ending May, according to a Labor Department report.

#bitcoin is an international asset. – Larry Fink, BlackRock CEO pic.twitter.com/WIVKITXYPj

— Michael Saylor ⚡️ (@saylor) 5 July 2023

BlackRock’s continued success in filling ETFs has led to optimism that its attempt at a bitcoin ETF could also be successful. According According to data from Eric Balchunas and James Seifert at Bloomberg Intelligence, only one of the 550 fund applications filed by the company has been rejected to date.

BlackRock’s application was followed by a wave of filings with the Securities and Exchange Commission (SEC), with Investco, Fidelity, WisdomTree and Arc Invest queuing up for regulatory approval. Several applications have been denied by the SEC in the past.

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