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JP Morgan analysts said that Wall Street may get a long-awaited Bitcoin exchange-traded fund (ETF) within months.
In a Wednesday report, the top investment bank said it was “most likely” that a spot Bitcoin ETF could get approved before January 10. Analysts at Bloomberg Intelligence added said that there is a 90% chance a Bitcoin ETF will get approved in January.
An ETF is an investment vehicle that tracks the value of an underlying asset, like gold, foreign currencies, or in this case, crypto.
A spot Bitcoin doesn’t yet exist in the States but would give investors exposure to cryptocurrency in a safe and easy way.
But the SEC has approved several Bitcoin futures ETFs, like Proshares’ Bitcoin Strategy ETF. There was huge interest in the products when they first launched, during a bull market, but since then, the interest in crypto futures ETFs has waned. Case in point: The ProShares fund, the first to win approval, trades on the NYSE Arca under the BITO ticker. It accumulated more than $1 billion in investment in its first two days, but hasn't grown beyond the initial rush. It now has $902 million worth of assets under management.
Investors are hungry for a spot Bitcoin ETF, experts say, but the U.S. Securities and Exchange Commission has denied applications for such a product, mostly citing the potential for market manipulation as one of the main reasons.
Now, though, analysts are more optimistic than ever before: BlackRock, world’s biggest fund manager, applied for a Bitcoin ETF of its own and fund manager Grayscale scored a victory against the SEC where a federal judge sided with the firm over its application to convert its flagship Bitcoin fund into an ETF.
The SEC currently has a long-list of applications sitting on its desk to review from major Wall Street players, including VanEck, WisdomTree, and ARK Invest.
Edited by Stacy Elliot