The analysts of JP Morgan have recently given their statement on the US SEC’s effect on Bitcoin ETF (exchange-traded fund). They believe that this would negatively affect the BTC rates in the upcoming term. Their report on Friday includes the analysts’ discussion on the effect of this SEC-approved Bitcoin ETF over the market of cryptocurrency. After the changes in the SEC’s leadership, optimism has increased over the approval of the Bitcoin ETF though.
Views of the analysts
Strategist Nikolaus Panigirtzoglou and other analysts have explained why they feel a negative outcome is imminent. For one thing, after the Bitcoin ETF came into effect in the US, the GBTC premium decreased to NAT. According to their estimation, this would displace a huge amount of GBTC investments. These investments are currently monetizing the GBTC premium, and that would fall drastically.
As per the analysts, a few institutional investors started using GBTC at NAV level in 2020’s second half. They had probably anticipated that they could sell GBTC following the 6-months-unlock-time. Then, when they do so in early 2021, they would gain their premium money.
The JP Morgan analysts state that the SEC-approved Bitcoin ETF would act as an alternative investment option for such investors. Indeed, the GBTC (Grayscale Bitcoin Trust) is highly important and has a good flow. Accordingly, too much GBTC outflows and its consequent premium collapse would badly affect Bitcoin price in the near term.
Long-term positive effects possible
Aside from the viewpoint above, these analysts have also stated the positive upside. They explain that over a long-term period, the SEC approval for Bitcoin ETF would have a good effect. In fact, many other Bitcoin enthusiasts maintain the negative impact is not possible at all.
Gabor Gurbacs, the Director of Digital Assets Strategy at Vaneck, gave his opposing argument on Twitter. His statement mentioned that the Bitcoin ETF can improve the Bitcoin industry and regular financial markets too. It is important to note that the company filed for a Bitcoin ETF proposal with the SEC recently.