Bitcoin (BTC) has experienced a noteworthy uptick in value this week, largely driven by growing optimism surrounding the potential approval of several spot Bitcoin exchange-traded funds (ETFs), as detailed in a research report from JPMorgan on Wednesday. According to the report, the US Securities and Exchange Commission (SEC) refraining from appealing a recent judgment in the Grayscale case has inched the approval of these applications closer to realisation. Grayscale is the firm overseeing the Grayscale Bitcoin Trust (GBTC), which stands as the world's largest cryptocurrency fund.
Although the precise timing of the approval remains uncertain, analysts, led by Nikolaos Panigirtzoglou, suggest it's likely to happen within the coming months and potentially before the January 10 deadline, which marks the final submission date for the Ark 21Shares applications.
Exchange-traded funds (ETFs) are securities traded on exchanges akin to stocks, designed to mirror the performance of an underlying asset. They are favoured among investors for offering exposure to cryptocurrencies without necessitating the direct acquisition of digital assets themselves. Additionally, ETFs are generally cost-effective to trade. The cryptocurrency market anticipates that the approval of a spot Bitcoin ETF will serve as a catalyst for substantial inflows of traditional capital into the sector.
JPMorgan emphasised its belief that the regulator is inclined to approve multiple applications concurrently, rather than providing an exclusive "first mover advantage" to a single applicant. This strategy, the bank argued, could be advantageous for investors by fostering competition in terms of ETF fees. The report also noted that Grayscale may experience intensified pressure to reduce fees if granted approval for its conversion into an ETF.
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