Bitcoin ETF approval unlikely to attract contemporary capital, says JPMorgan

JPMorgan Chase (NYSE:) analysts have expressed concern over the latest crypto market surge, attributing it to heightened investor expectations spurred by potential SEC approval of spot ETFs and an anticipated easing of SEC’s supervisory strategy. As Bitcoin’s worth surpassed $36,000, edging in direction of $37,000, the analysts additionally challenged the chance of a relaxed SEC coverage post-approval as a result of largely unregulated nature of the business.

The analysts foresee new ETFs reallocating present capital slightly than attracting contemporary funds. They pointed to muted curiosity in non-U.S. Bitcoin ETFs as a possible indicator of this pattern. Regardless of latest authorized victories for Ripple and Grayscale in opposition to the SEC, they cautioned in opposition to anticipating a considerable regulatory reversal within the crypto business attributable to pending US crypto rules and reminiscences of FTX fraud.

The staff additionally famous that the forthcoming halving cycle in April is impacting crypto markets however is already priced into bitcoin’s present worth. Amidst historic ranges of bitcoin hoarding and future provide strain, they preserve that any value hikes from the 2024 Bitcoin halving occasion are already pre-factored into the market.

The market dynamics have taken an extra twist because the SEC enters negotiations with Grayscale about changing its BTC fund right into a spot Bitcoin ETF, intensifying anticipation round coverage leisure. Nonetheless, JPMorgan analysts predict these funds will draw from present bitcoin investments slightly than new capital, anticipating a relative worth commerce.

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