BlackRock’s Spot Bitcoin ETF Filing Ignites Crypto Market

BlackRock’s filing of a spot Bitcoin exchange-traded fund (ETF) last month sparked a significant storm in the cryptocurrency space, leading to a $31,000 BTC price increase.

Several major players, including Fidelity, WisdomTree, and others, filed applications with the US SEC.

While the market is optimistic about these developments, JPMorgan believes they will have little impact on the cryptocurrency market.

JPMorgan provided several reasons for its analysis in its research report dated Thursday, July 6.

JPMorgan noted that the SEC has not yet approved an ETF for the Bitcoin spot.

In the past, the US securities regulator has denied several spot Bitcoin ETF applications.

JPMorgan notes that investors have a renewed sense of optimism because they believe the SEC’s previous concerns have been addressed.

JPMorgan analysts led by Nikolaos Panigirtzoglou wrote:

“Spot bitcoin ETFs [have] existed for some time outside the United States, in Canada and Europe, but have failed to garner significant investor interest.”

JPMorgan added in its report that the spot Bitcoin ETF will eventually surpass the futures Bitcoin ETF.

“Spot ETFs are more likely than futures-based ETFs to reflect real-time supply and demand, and their approval in the U.S. would bring more liquidity and enhance price transparency in spot bitcoin markets,” according to a JPMorgan report obtained by CoinDesk.

Physically backed bitcoin exchange-traded funds (ETFs) offer a few minor advantages over futures-based funds, according to the note.

Spot ETFs provide a more accessible and secure way to invest in bitcoin by eliminating the complexities associated with custody, BTC transfer, and basis risk inherent to futures-based products.

In addition, the report notes that the flow of funds into Bitcoin has been somewhat slow.

“Bitcoin funds overall, including futures-based and physically backed funds, have attracted little investor interest since Q2 2021, also failing to benefit from investor outflows from gold ETFs over the past year or so,” according to the report.