Bitcoin (BTC) rose this week on increased optimism over the potential approval of several exchange-traded funds (ETFs), JPMorgan (JPM) said in a research report on Wednesday.
The SEC’s decision not to appeal the recent ruling in the Grayscale case brings approval of the applications closer, the report said. Grayscale is the manager of Grayscale Bitcoin Trust (GBTC), the world’s largest cryptocurrency fund.
The timing of approval is unclear, but it should happen within months, possibly before January 2019. Analysts led by Nikolaos Panigirzoglou wrote that January 10 is the deadline for applications for Ark 21Shares.
ETFs are traded on an exchange, like stocks, and track the performance of the underlying assets. They are very popular because they allow investors to access cryptocurrencies without having to purchase the underlying digital assets themselves. It is also cheaper to trade. The cryptocurrency market hopes that the approval of a Bitcoin exchange-traded fund will lead to an influx of mainstream funds into the sector.
The bank reiterated its view that the regulator is more likely to approve multiple applications at once rather than grant a “first mover advantage” to any single applicant.
JPMorgan said such a move could be beneficial to investors because it would encourage competition regarding ETF fees.
“Grayscale will likely face greater pressure to reduce fees if the institution receives approval to convert to an ETF,” the report said.
CoinDesk’s parent company, Digitalency Group, also owns Grayscale.
