Bitcoin (BTC) has gained this week as optimism increased over the possible approval of several spot Bitcoin exchange-traded funds (ETFs), JPMorgan (JPM) said in a research report on Wednesday.
The Securities and Exchange Commission’s (SEC) decision not to appeal a recent ruling in the Grayscale case brings approval of the applications closer, the report said. Grayscale is the manager of the Grayscale Bitcoin Trust (GBTC), the largest cryptocurrency fund in the world.
The timing of an approval is unclear, but should come within a few months and likely before Jan. 10, the final deadline for the Ark 21Shares applications, analysts led by Nikolaos Panigirtzoglou wrote.
ETFs are traded like stocks on a stock exchange and reflect the performance of an underlying asset. They are popular because they allow investors to access cryptocurrencies without having to purchase the underlying digital assets themselves. They are also cheaper in stores. The crypto market is hoping that the approval of a spot Bitcoin ETF will lead to a flood of mainstream money into the sector.
The bank reiterated its view that the regulator would likely approve multiple applications at the same time rather than granting a “first mover advantage” to a single applicant.
JPMorgan said such a move could be beneficial for investors because it would encourage competition in ETF fees.
“Grayscale will likely face greater pressure to reduce fees if the trust receives approval to convert to an ETF,” the report said.
CoinDesk’s parent company, Digital Currency Group, also owns Grayscale.
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