Expectations of Approval for Bitcoin Spot ETFs in the USA Among JPMorgan Analysts
Date: 2023-10-21 Author: Dima Zakharov Categories: CRYPTO PAYMENTS, IN WORLD
Expectations of Approval for Bitcoin Spot ETFs in the USA
Analysts at JPMorgan have expressed optimism regarding the approval of applications for the launch of Bitcoin spot ETFs in the United States. Their forecast is based on recent regulatory actions and a recent decision concerning Grayscale Investments.
A significant development that suggests the approval of Bitcoin spot ETFs is the decision by the U.S. Securities and Exchange Commission (SEC) not to appeal the ruling in the Grayscale Investments case. The company is seeking to convert its trust fund, Grayscale Bitcoin Trust (GBTC), into a Bitcoin spot ETF. The SEC's confirmation of its decision not to appeal can be seen as a signal in favor of permitting such ETFs.
It is expected that the approval of Bitcoin spot ETFs will occur within the next few months, with a deadline set for January 10, 2024. This deadline is the earliest among all the final deadlines set by the SEC for applications to launch similar products. Therefore, analysts predict that investors and traders may soon have access to Bitcoin spot ETFs on the U.S. market.
Potential Disappearance of the GBTC Discount
Another important aspect related to expectations of Bitcoin spot ETF approval is the potential disappearance of the discount on Grayscale Bitcoin Trust (GBTC). Currently, GBTC is the largest Bitcoin fund managed by Grayscale, with assets totaling $17.7 billion.
However, there is a discount on GBTC shares, which represents the difference between the fund's share price and their market value in Bitcoin. Analysts claim that this discount may disappear after the transformation of GBTC into a Bitcoin spot ETF. This will occur thanks to the arbitrage mechanism of share redemption/creation within the ETF structure.
The disappearance of the GBTC discount is significant for investors because it means that their investments will trade at a price closely aligned with the market price of Bitcoin. It may also lead to increased interest in Bitcoin ETFs among investors who may have previously considered the GBTC discount a drawback of the investment product.
