Bitcoin ETF Approval Could Increase Liquidity, JPMorgan Says

• The report by JPMorgan Managing Director Nikolaos Panigirtzoglou suggests that a Bitcoin ETF approval in the U.S. will have similar impact as those seen in Canada and Europe, with little investor interest overall.
• According to BlackRock CEO Larry Fink, investors may turn to Bitcoin as a hedge against inflation and fiat currency devaluation given the current annual inflation rate of 4%.
• However, Eric Balchunas and James Seyffart’s data from Bloomberg Intelligence shows that only one of 550 funds filed by BlackRock has been rejected so far.

JPMorgan’s Report on Spot Bitcoin ETFs

A report by JPMorgan managing director Nikolaos Panigirtzoglou states that spot Bitcoin exchange-traded funds (ETF) won’t be a game changer for crypto markets, although it might benefit the leading cryptocurrency. Panigirtzoglou believes that a Bitcoin (BTC) ETF in the United States would produce similar results to what has been seen in Canada and Europe, where spot Bitcoin ETFs have been around for some time without drawing large investor interest. The strategist also sees potential benefits of an approval of a Bitcoin fund in America; it could bring more liquidity to Bitcoin markets but may lead to trading activity migrating away from BTC futures products.

BlackRock CEO’s View on Alternative Assets

In an interview on July 6th, BlackRock CEO Larry Fink suggested that investors could turn to Bitcoin as a hedge against inflation and fiat currency devaluation given the current annual inflation rate of 4%. He said: “Let’s be clear: Bitcoin is an international asset… It’s not based on any one currency, and so it can represent an asset that people can play as an alternative.” As reported by the Labor Department, the annual inflation rate for the U.S. was 4% for the 12 months ending in May.

Expectations Around US Approval

High expectations surround an approval of a US-based Bitcoin ETF due to BlackRock’s consistent success in filling ETFs – only one out of 550 funds filed has been rejected thus far according to data from Eric Balchunas and James Seyffart at Bloomberg Intelligence.

Potential Impact On Crypto Markets

If approved, this could bring more liquidity into crypto markets, while also potentially leading to trading activity migrating away from BTC futures products towards these new offerings. However, it is unlikely to be a game changing event – similar results have already been observed elsewhere when spot bitcoin ETFs were launched without attracting much investor interest overall.

Conclusion

Overall there is potential for increased liquidity within crypto markets if a US-based bitcoin ETF is approved however this alone likely won’t revolutionize or transform them significantly despite high expectations surrounding such news events due to past experiences when similar products were launched overseas without attracting much attention from investors