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JP Morgan Anticipates SEC to Grant Approval for Bitcoin ETFs – Discover the Convincing Reasons

JP Morgan Anticipates SEC to Grant Approval for Bitcoin ETFs - Discover the Convincing Reasons

JP Morgan Predicts SEC Will Be Forced To Approve ETFs, Here's Why

According to JP Morgan analysts, led by Nikolaos Panigirtzoglou, it is predicted that the US Securities and Exchange Commission (SEC) will likely have to give the green light to several spot Bitcoin Exchange-Traded Funds (ETFs). This forecast comes after a recent legal victory for Grayscale against the SEC.

Legal Triumph for Grayscale

Last week, a federal court ordered the SEC to reconsider its previous rejection of Grayscale's proposal to convert its BTC Trust (GBTC) into a spot ETF. The court deemed the SEC's decision to be “arbitrary and capricious,” as it failed to provide clear reasons for its differential treatment of futures-based ETFs and spot-based Bitcoin ETFs. The court emphasized the close correlation between the spot market and the CME futures market, highlighting the lack of a solid foundation for the SEC's rejection.

JP Morgan Predicts Spot Bitcoin ETF Approval

Nikolaos Panigirtzoglou commented that, in order to defend its denial of Grayscale's proposal, “The SEC would have to retroactively withdraw its previous approval of futures-based Bitcoin ETFs.” He further stated that such a move would be disruptive and embarrassing for the SEC. Given these circumstances, it is more likely that the SEC will approve the pending spot Bitcoin ETF applications from various asset managers, including Grayscale.

The recent announcement by the SEC to postpone the decisions on spot ETFs from major financial players like BlackRock, Fidelity, and Invesco until mid-October has further fueled speculation. JP Morgan analysts interpret the delay as a strategic move by the SEC to potentially approve multiple spot Bitcoin ETF applications simultaneously.

Not All Sunshine and Rainbows

Despite the potential approval of spot ETFs in the US being a significant milestone, JP Morgan analysts have also sounded a note of caution. They point out that spot BTC ETFs have been operational in regions like and Europe for some time but have not seen substantial investor traction. Additionally, the analysts note that outflows from gold ETFs in the past year have not significantly benefited Bitcoin funds, including futures ETFs.

However, it's not all bad . A few days ago, Panigirtzoglou predicted that the current sell-off may be coming to an end, as open interest in CME BTC futures contracts has declined. He anticipates that the market will bottom out in the coming weeks and experience a rebound in the second half of the year.

As of now, BTC is trading at $25,974.

In Summary

JP Morgan analysts predict that the SEC will be forced to approve several spot Bitcoin ETFs following Grayscale's legal victory. The court's order for the SEC to reconsider its rejection of Grayscale's proposal on the grounds of “arbitrary and capricious” decision-making sets a precedent. The delay in decisions on spot ETFs by major financial firms further fuels speculation that the SEC may approve multiple applications simultaneously. However, it's important to note that spot BTC ETFs have not gained much investor traction in other regions, and outflows from gold ETFs have not significantly benefited Bitcoin funds. On a positive note, there are indications that the current sell-off may be ending, with a predicted market rebound in the second half of the year.

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