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JP Morgan\u2019s analysts say that the U.S. Securities and Exchange Commission (SEC) approving a bitcoin exchange-traded fund (ETF) is likely negative for bitcoin in the near term. There is optimism around the prospect of the SEC approving a bitcoin ETF under new leadership, the analysts say.<\/strong><\/p>\n JP Morgan published a report on Friday that discusses the impact of an SEC-approved bitcoin ETF on the bitcoin market. \u201cOptimism around the prospect of the SEC approving a bitcoin ETF in the US this year has risen in anticipation of SEC leadership changes<\/a>,\u201d the analysts wrote, stating:<\/p>\n The approval of a bitcoin ETF in the US this year would likely be negative for bitcoin in the near term.<\/p>\n<\/blockquote>\n The analysts, including strategist Nikolaos Panigirtzoglou, proceeded to explain why they are forecasting a negative outlook. \u201cThe reason is a potential decline in the Grayscale Bitcoin Trust (GBTC) premium to NAV [net asset value] from the introduction of bitcoin ETF in the US, which would unwind a big portion of GBTC investments currently placed for monetizing this premium.\u201d<\/p>\n They elaborated that \u201cSome institutional investors likely subscribed to GBTC (at NAV) during the second half of last year with the intention of selling after the 6m unlock period \u2026 As the 6m unlocked period expires, some of these institutional investors might sell GBTC during the first half of 2021 to monetize the premium. If it materializes, this selling pressure would put downward pressure on GBTC premiums.\u201d<\/p>\n Emphasizing that a bitcoin ETF would provide an alternative investment vehicle to GBTC for institutional investors, the JP Morgan analysts concluded:<\/p>\n A cascade of GBTC outflows and a collapse of its premium would likely have negative near-term implications for bitcoin given the flow and signaling importance of GBTC.<\/p>\n<\/blockquote>\n Nonetheless, JP Morgan\u2019s analysts admitted in their report that the approval of a bitcoin ETF in the U.S. would be positive for bitcoin over the long term.<\/p>\n <\/ins> <\/ins> <\/p>\n Many people on Twitter disagree with the assessment by JP Morgan\u2019s analysts that an SEC-approved bitcoin ETF would be negative for the industry at all. Vaneck\u2019s director of digital assets strategy, Gabor Gurbacs, tweeted that \u201cInstitutions want a bitcoin ETF<\/a>.\u201d His company recently filed a proposal with the SEC for a bitcoin ETF.<\/p>\n Gurbacs opined: \u201cI believe that a bitcoin ETF may bring many structural benefits to the bitcoin as well as traditional financial markets.\u201d Contrasting JP Morgan analysts\u2019 view, the Vaneck director wrote, \u201cThe approval of a bitcoin ETF would be positive for bitcoin in the near as well as long term.\u201d<\/p>\nSEC Approving Bitcoin ETF Could Be Negative<\/h2>\n
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