JPMorgan Understates the TradFi Onslaught on Spot Bitcoin ETFs

**JPMorgan Skeptical of BlackRock’s Spot Bitcoin ETF, Says It Won’t Be a Game Changer**


When BlackRock recently applied to create a spot Bitcoin ETF, many believed that it could lead to a surge in prices. However, JPMorgan has expressed skepticism about the potential impact of such investment vehicles on the crypto markets.

**SEC Rejections and Lack of Investor Interest**

JPMorgan argues that previous rejections of spot Bitcoin ETF applications by the Securities and Exchange Commission (SEC) indicate that even if BlackRock, Fidelity, and other firms are approved, it does not guarantee investor interest. They point out that similar ETFs in Canada and Europe have not seen significant inflows. The Purpose Bitcoin ETF in Canada, considered the largest in the world, has experienced limited investor interest for the past two years.

The report from JPMorgan states, “Bitcoin funds overall, including futures-based and physically-backed funds, have attracted little investor interest since Q2 2021, also failing to benefit from investor outflows from gold ETFs over the past year or so.”

**Marginal Advantages of a Spot Bitcoin ETF**

According to JPMorgan’s analysts, the advantages of a spot Bitcoin ETF seem marginal. While they could simplify the process of buying Bitcoin for average consumers and add liquidity and price transparency to the market, they could also redirect trading activity from existing U.S. Bitcoin futures or even replace them entirely.

**JPMorgan’s Involvement in the Crypto Space**

Despite the cautious outlook on spot Bitcoin ETFs, JPMorgan has been actively involved in the crypto space. The company was among the first traditional financial firms to offer its wealth management clients access to cryptocurrency funds in 2021. In 2022, JPMorgan also explored the use of blockchain for collateral settlements on a private blockchain.

**BlackRock and Other Firms Persisting with ETF Applications**

Despite the potential challenges highlighted by the SEC and JPMorgan, BlackRock and other traditional financial firms continue to pursue spot Bitcoin ETF applications. Following the SEC’s criticism of inadequate applications, several were recently refiled, including those from BlackRock and Fidelity.

**BlackRock CEO’s Vision for the ETF**

BlackRock CEO Larry Fink stated in an interview that the firm’s spot Bitcoin ETF aims to make crypto investing more affordable and accessible to a wider audience.

**Bitcoin Hits 14-Month High**

Notably, Bitcoin hit its highest price in over a year after the growing participation of traditional finance firms in the sector. However, at the time of writing, Bitcoin was trading slightly below $30,300.


While BlackRock’s application for a spot Bitcoin ETF has generated significant attention, JPMorgan remains skeptical about its potential impact on the crypto markets. They highlight the SEC’s past rejections and limited investor interest in similar ETFs. Despite these challenges, BlackRock and other firms continue to pursue ETF applications in hopes of bringing more accessibility and affordability to crypto investing.

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De Weere – Fire Breaks Out on August 6, 2023