Cool, but not essential. The prospect of seeing (finally) approved a Bitcoin Cash ETF (BTC) is on everyone’s lips in the cryptosphere… especially since BlackRock and other financial giants recently jumped on board. But if such an event is highly anticipatedit would not be not so decisive for the sector. At least, that’s what the mega-bank’s analysts think. JP Morgan.
ETF approval spot Bitcoin unlikely to change the game
The gigantic fund BlackRockwith $10,000 billion in assets under management, is an important ally (super heavyweight category), for the crypto community’s never-ending boxing match with the Securities and Exchange Commission (SEC). The SEC has stubbornly refused to approve a Bitcoin spot exchange-traded fund (ETF) for years.
Yet, according to a recent report of the banking multinational JP Morganthe cryptosphere should not be so fixated for such a financial product to finally be approved in the United States. Firstly, because BTC-backed ETFs have been approved elsewherebut also because they don’t represent a kind of magic lock that has to be broken in order to attract a massive influx of institutional investors.
« ETFs spot Bitcoin funds have existed for some time outside the United States, in Canada and Europe (…) Bitcoin funds as a whole, including futures-based funds (futures) and physically-backed funds, have attracted relatively little investor interest since the second quarter of 2021. Nor have they particularly benefited from investor outflows from gold ETFs over the past year. »
Extract from the analyst report by Nikolaos Panigirtzoglou (JP Morgan)
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Funds based on real BTC would help market liquidity
Of course, even if ETFs spot BTC do not seem not vital for the crypto market in the eyes of JP Morgan specialists, they are nonetheless interesting on several levels.
Unlike ETFs futureswhich are simple dollar-settled BTC price replicators, spot ETFs – in addition to the necessity to be backed by real bitcoins – would consolidate and professionalize the market for the king of cryptocurrencies.
« ETFs spot [de Bitcoin] are more likely than ETFs futures to reflect supply and demand in real time. And their approval in the U.S. would bring more liquidity, while improving price transparency in Bitcoin spot markets. »
Excerpt from the report
While we wouldn’t spit in the face of approval for an ETF spot BTC by the SEC (especially since we’ve been waiting for it for so long), Satoshi Nakamoto’s invention wouldn’t have any no need to continue on his way towards mass adoption. Institutional giants such as BlackRock have understood this. Its CEO, Larry Fink, explains that « Bitcoin digitizes gold « because the crypto-asset, with its fixed supply of 21 million units, has become a « must-have ». protection against inflation state fiat currencies.
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