The approval of an ETF that invests directly in Bitcoin in the United States, according to analysts at JPMorgan, may not represent the shocking change for the cryptocurrency markets that many digital asset advocates have long awaited.
Despite optimism that such a fund could get the blessing of the authorities, any approval would not transform the sector so drastically. Similar products have existed in Canada and Europe for years with no sizable influxes being observed. Bitcoin funds overall have “attracted little investor interest” over the past two years, “without benefiting from investor exits from gold ETFs,” the investment bank said in a note.
Several issuers have recently filed applications for spot Bitcoin ETFs in the US, which the Securities and Exchange Commission has previously viewed with great skepticism, denying dozens of attempts for such a product over the past decade. Regulators have cited the possibility of market manipulation, among other reasons, as a reason why a Bitcoin ETF shouldn’t be traded.
However, this year there has been more optimism about a green light, thanks to the request of the giant BlackRock, which has a near-immaculate track record of submitting and receiving approval for all types of exchange-traded funds.
Bitcoin and other cryptocurrencies have rallied since BlackRock filed in mid-June. The largest cryptocurrency, currently trading at around $30,200, is up about 15% over the past month.