Grayscale's Triumph Could Force SEC to Approve Spot Bitcoin ETFs, JPMorgan Predicts
JPMorgan suggests that, in light of Grayscale's recent legal success against the SEC, the approval of spot Bitcoin ETFs may become inevitable for the SEC.
Because Bitcoin
September 3, 2023
The Block reported that JPMorgan predicts that the United States Securities and Exchange Commission (SEC) may have no choice but to approve multiple spot Bitcoin ETF applications following Grayscale's recent legal victory against the SEC. Grayscale's win implies that the SEC might have to withdraw its previous approval of futures-based Bitcoin ETFs to defend its denial of Grayscale's proposal to convert its Bitcoin trust into an ETF, a move seen as disruptive and embarrassing for the SEC. Therefore, it's more likely that the SEC will be compelled to approve pending spot Bitcoin ETF applications from various asset managers.
The SEC recently announced a delay in decisions on spot Bitcoin ETFs from firms like BlackRock and Fidelity, possibly signaling simultaneous approvals and increased competition in ETF fees. Grayscale may also face pressure to lower fees if its trust becomes the largest Bitcoin spot ETF.
However, JPMorgan analysts suggest that while Grayscale's win brings spot Bitcoin ETF approval closer, it may not significantly impact the crypto market. Spot Bitcoin ETFs have existed in Canada and Europe but haven't garnered substantial investor interest. Outflows from gold ETFs haven't translated into overall benefits for Bitcoin funds, including futures ETFs, and the advantages of spot Bitcoin ETFs over futures ETFs are minor.
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