Increased confidence around the possible approval of numerous spot bitcoin exchange-traded funds (ETFs) has contributed to the rise in Bitcoin (BTC) this week, according to a research report released by JPMorgan (JPM).
The applications’ clearance is getting closer thanks to the Securities and Exchange Commission’s (SEC) decision not to appeal a recent decision in the Grayscale case, the article stated. Grayscale is the manager of the world’s largest cryptocurrency fund, the Grayscale Bitcoin Trust (GBTC).
The approval process is not yet known, but analysts under Nikolaos Panigirtzoglou said that it should occur within months and most likely before January 10, which is the last day to submit an Ark 21Shares application.
ETFs track an underlying asset’s performance and are exchanged on an exchange, much like stocks. Since they give investors access to cryptocurrencies without requiring them to buy the underlying digital assets directly, they are very popular. Plus, trading them is less expensive. The bitcoin market anticipates a surge in mainstream investment in the space following the introduction of a spot ETF.
The bank restated its belief that, rather than giving any one applicant a “first mover advantage,” the regulator would probably approve several applications at once.
According to JPMorgan, a move of this kind may be advantageous for investors since it would promote competition with regard to ETF fees.
According to the study, “Grayscale will probably come under more pressure to reduce fees if the trust is approved to be converted into an ETF.”