The SEC is Expected to Approve Multiple Spot Bitcoin ETFs Soon
According to JPMorgan, the Securities and Exchange Commission (SEC) is likely to approve several spot bitcoin exchange-traded fund (ETF) applications in the near future. This prediction is based on the fact that the SEC did not appeal a recent court ruling in favor of Grayscale Investments. JPMorgan analysts believe that the approvals could happen within months and possibly before January 10, 2024, which is the final deadline for certain applications.
Increased Optimism for Spot Bitcoin ETF Approvals
The SEC’s decision not to appeal the Grayscale case has led to “increased optimism” for the approval of multiple spot bitcoin ETFs. JPMorgan analysts previously stated that the court ruling would likely force the SEC to approve these ETFs. The timing of the approvals, however, remains uncertain.
Grayscale May Have to Lower GBTC Fees
If spot bitcoin ETF approval becomes more likely for Grayscale’s Bitcoin Trust (GBTC), there may be pressure for the company to reduce its fees. Additionally, the share redemption/creation arbitrage mechanism in an ETF structure could eliminate GBTC’s discount to net asset value. The analysts estimate that this change could benefit investors by around $2 billion.
Competition and Investor Interest
The JPMorgan analysts also noted that the SEC is unlikely to grant a first-mover advantage and approve multiple spot bitcoin ETFs simultaneously. This could lead to increased competition among ETF providers, potentially resulting in lower fees for investors. However, it is worth noting that while a spot bitcoin ETF approval is highly anticipated by crypto enthusiasts, it may not have a significant impact on crypto markets. Similar ETFs have been available in Canada and Europe without attracting substantial investor interest.
Hot Take: Spot Bitcoin ETF Approvals Expected Soon
The SEC’s decision not to appeal the ruling in the Grayscale case has raised hopes for the approval of multiple spot bitcoin ETFs. JPMorgan analysts believe that these approvals could happen within months, possibly before January 10, 2024. If approved, Grayscale may face pressure to lower fees for its Bitcoin Trust (GBTC), and investors could benefit from the elimination of GBTC’s discount to net asset value. However, it is important to note that while a spot bitcoin ETF approval is highly anticipated, it may not have a transformative effect on crypto markets.
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