According to JPMorgan Chase & Co., the US approval of a traded fund in exchange for Bitcoin could weigh on the price of digital currency in the short term.
This is due to the fact that the competition of such a vehicle could cause departures from the Grayscale Bitcoin Trust, the world’s largest cryptocurrency fund. The ETF would erode the effective monopoly of gray-scale confidence, causing outflows and a drop in its premium to the net asset value, which in turn could hurt the price of Bitcoin, the notes wrote in a statement. strategists led by Nikolaos Panigirtzoglou.
“A cascade of GBTC outflows and a collapse in its premium would likely have negative short-term implications for Bitcoin given the importance of GBTC’s flow and signaling,” they said on Friday.
Some commentators believe that approving a Bitcoin ETF in the US is more likely to change leadership in the Securities and Exchange Commission. VanEck Associates Corp. recently submitted to the regulator to offer one, after withdrawing from a previous effort. JPMorgan strategists said the introduction of a Bitcoin ETF should be positive for the long-term cryptocurrency.
Bitcoin fell on Monday, sliding up 15% to about $ 32,400. The fall shook faith in the volatile cryptocurrency boom. The digital currency, which hit a record high of nearly $ 42,000 on Jan. 8, traded at $ 35,400 as of 8:26 a.m. in London.
(Updates with the last paragraph of Bitcoin move.)