Bitcoin ETFs have been a hot issue for some time. Due to the recent ruling in the long-running battle between Grayscale and the SEC, this has significantly increased. Speculation has grown as a result of the federal court ordering the SEC to review its Grayscale application of a Bitcoin ETF.
The SEC will probably have to approve a number of Bitcoin spot ETFs, according to one of the most recent reports from JPMorgan, leaving them with little other option.
JP Morgan Analyst’s Views
Grayscale’s victory suggests that the SEC would need to retroactively revoke its prior approval of futures-based Bitcoin ETFs to defend its denial of Grayscale’s proposal to convert its Bitcoin trust into an ETF. Still, such a move would be “very disruptive and embarrassing for the SEC” and appears unlikely, according to JPMorgan analysts led by Nikolaos Panigirtzoglou in a note on Friday. Therefore, “it looks more likely that the SEC would be forced to approve the spot Bitcoin ETF applications that are still pending from several asset managers, including Grayscale,” the analysts said.
Decisions by the SEC on spot Bitcoin ETFs that have recently been put up by a number of companies, including traditional financial industry titans like BlackRock, Fidelity Investments, and Invesco, have been delayed until at least mid-October.
According to the analysts, “The delay likely points to approval of multiple spot Bitcoin ETF applications at once rather than granting a first-mover advantage to any single applicant.”
If Grayscale’s trust gets converted to the largest Bitcoin spot ETF in the world, it might increase competition in ETF fees and pressure Grayscale to cut its fees.
Although the regulatory process for spot Bitcoin ETFs is moving forward favorably, JP Morgan thinks these products won’t substantially impact the entire financial and crypto industries.