Bitcoin ETF Could Tank Prices, Say JPMorgan StrategistsJanuary 11, 2021
- The crypto space has long been awaiting an ETF to grant Bitcoin more mainstream exposure.
- Strategists at JPMorgan now think an ETF could undermine the Grayscale Bitcoin Trust prices.
- A price slide in the Grayscale trust would likely trigger a wider effect on Bitcoin prices.
JPMorgan strategists believe that if a Bitcoin ETF finally gets the green light from U.S. regulators, BTC could suffer in the short term. Some firms, like Grayscale, would bear more than just price damage too.
ETF Could Hurt Bitcoin’s Bull Run
Due to the lack of ETFs on the market, the Grayscale trust effectively has a monopoly on crypto funds. The trust also trades on a very high premium for its services due to the product’s redemption and unlock feature.
An ETF competition could trigger sudden outflows from the trust and a drop in GBTC, potentially having a ripple effect on BTC. JP Morgan strategist Nikolaos Panigirtzoglou said:
“A cascade of GBTC outflows and a collapse of its premium would likely have negative near-term implications for Bitcoin given the flow and signaling importance of GBTC.”
With the SEC launching a dedicated crypto regulation desk and chairman Jay Clayton stepping down, many in the space view an ETF as increasingly likely. VanEck launched another Bitcoin ETF attempt at the end of last year, and it may simply be a matter of time before an ETF is approved.
However, strategists did agree that the introduction of such a product should have a positive impact on Bitcoin overall in the long term.
However, commentators like Andreas Antonopoulos have warned that a Bitcoin ETF would give institutions a disproportionate amount of voting power, potentially impacting decentralization and the integrity of the project overall.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
Source: Read Full Article