SEC Expected to Approve Bitcoin ETFs, Says JP Morgan After Grayscale’s Win
In Brief
JP Morgan analysts predict that a recent court ruling favoring Grayscale could compel the SEC to approve several Bitcoin spot ETF applications.
The court decision questioned the SEC’s inconsistency in treating futures-based and spot Bitcoin ETFs, potentially reshaping the cryptocurrency investment landscape.
Investment giant JP Morgan suggests that the Securities and Exchange Commission (SEC) may have to approve several Bitcoin exchange-traded fund (ETF) applications after investment company Grayscale’s win against the SEC.
A recent court decision rekindled the Bitcoin ETF debate. Grayscale’s victory against the SEC, which ordered the regulatory body to review its application for a Bitcoin ETF, has raised speculation about the future of cryptocurrency investments.
“It looks more likely that the SEC would be forced to approve the spot Bitcoin ETF applications that are still pending from several asset managers, including Grayscale,”
JP Morgan analysts said.
Furthermore, the analysts suggest that the SEC may have little choice but to approve multiple Bitcoin spot ETFs, as retroactively revoking approval for futures-based ETFs could be “disruptive and embarrassing.”
A few days ago, a federal court mandated the SEC to reconsider its refusal of Grayscale’s bid to transform the Grayscale Bitcoin Trust (GBTC) into an ETF. The court’s decision was based on the argument that there was no valid reason for the SEC to permit futures-based Bitcoin ETFs while rejecting spot Bitcoin ETFs. Besides, both types of products carry a comparable risk of fraud and manipulation, given the close correlation between the spot Bitcoin market and the CME Bitcoin futures market.
Consequently, the court deemed the SEC’s rejection of Grayscale’s proposal as “unreasoned and inconsistent” since the agency did not provide a satisfactory explanation for treating similar products differently.
The delay in decisions on spot Bitcoin ETFs, including applications from industry giants like BlackRock and Fidelity Investments, can be a signal that approval may come for several applicants simultaneously. This shift may increase ETF fee competition, but JP Morgan thinks it will have a limited impact on the broader financial and crypto industries.
Last week, the U.S. District of Columbia Court of Appeals ruled in favor of Grayscale Investments in its lawsuit against the SEC, potentially opening the door for a Bitcoin ETF. The market responded positively, with Bitcoin prices surging, and many believed this court decision was a major factor behind the current bull run in the cryptocurrency.
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Agne is a journalist who covers the latest trends and developments in the metaverse, AI, and Web3 industries for the Metaverse Post. Her passion for storytelling has led her to conduct numerous interviews with experts in these fields, always seeking to uncover exciting and engaging stories. Agne holds a Bachelor’s degree in literature and has an extensive background in writing about a wide range of topics including travel, art, and culture. She has also volunteered as an editor for the animal rights organization, where she helped raise awareness about animal welfare issues. Contact her on [email protected].
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Agne is a journalist who covers the latest trends and developments in the metaverse, AI, and Web3 industries for the Metaverse Post. Her passion for storytelling has led her to conduct numerous interviews with experts in these fields, always seeking to uncover exciting and engaging stories. Agne holds a Bachelor’s degree in literature and has an extensive background in writing about a wide range of topics including travel, art, and culture. She has also volunteered as an editor for the animal rights organization, where she helped raise awareness about animal welfare issues. Contact her on [email protected].
