Global banking giant JP Morgan has addressed the potential of spot Bitcoin Exchange-Traded Funds (ETFs) in a research report. Analysts at JP Morgan are uncertain about the amount of new capital these new spot Bitcoin ETFs will attract, but they anticipate it could be higher compared to other crypto-based investment products.
The report notes the market’s muted response to the reluctant approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC), shifting the focus to the amount of capital these ETFs will draw.
Led by Nikolaos Panigirtzoglou, JP Morgan analysts express skepticism about the optimistic view shared by many market participants that the approval of spot Bitcoin ETFs will lead to a significant influx of new capital into the crypto market.
Despite this, JP Morgan forecasts a substantial rotation into the new spot ETFs from existing crypto-based investment products, potentially reaching up to $36 billion, even if no new capital enters the crypto market.
Furthermore, JP Morgan expects investors who profited from purchasing discounted GBTC shares in the secondary market last year to transition to new spot Bitcoin ETFs. They also predict a $20 billion shift from individual investors moving from crypto exchange wallets to the new ETFs. The report suggests that high fund management fees charged by Grayscale could trigger exits to ETFs with lower fees, like those offered by BlackRock, predicting a relatively quick departure from GBTC due to its higher fees.