Anticipation over the possible approval of Bitcoin and Ethereum exchange-traded funds drove digital asset prices to multi-month highs.
The cryptocurrency market is going through a phase of optimism. The expectation for the possible approval of spot bitcoin (BTC) exchange-traded funds (ETFs), as well as the request for BlackRock and other companies to create a ethereum ETF (ETH) in spot, led to the prices of the digital assets to multi-month highs and renewed investors’ appetite for risk. Although many analysts believe that these increases can be sustained over time, others believe that they are exaggerated.
This is the case of the experts of JP Morgan, who have been somewhat skeptical of this bullish movement. In this sense, although they highlight that “the approval of a spot bitcoin ETF would help cryptocurrency marketssa attract fresh capital” and approval “would cement a victory for the cryptocurrency industry and a setback for the Securities and Exchange Commission (SEC), making it more likely that in the future the approach of the SEC softens,” There are several arguments against the current bullish thesis.
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On the one hand, the New York bank believes that rather than new capital entering the cryptocurrency sector, it is more likely that existing capital will be moved from current bitcoin products, such as the Grayscale Bitcoin Trust (GBTC), bitcoin futures ETFs and listed mining companies, to spot ETFS.
In this sense, JP Morgan recalled on several occasions in recent months that these investment products already exist in Canada and Europe and have aroused “little interest among investors since their creation.” It should be noted that in recent months, the launch of several ETH futures ETFs disappointed the market.
Cryptocurrencies: JPMorgan emphasizes regulation
On the other hand, the experts of the American firm highlight that the judicial defeats before Grayscale and Ripple, “While they represent a severe setback for the SEC, it is not clear that it will change its approach.”given how little regulated the sector is.”
“The regulations of the sector of cryptocurrencies in the US “are still pending and we do not believe that US legislators will change their position due to the two legal cases mentioned, especially with memories of the FTX fraud still fresh,” they assured from JP Morgan. It should be noted that the SEC has not yet resolved its lawsuits against Binance and Coinbase and that still could reject ETFs proposed cash.
Source: Ambito
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