Since the launch of three new Bitcoin Exchange Traded Funds (ETFs) in Canada in February, the calls for the U.S SEC to license new Bitcoin ETFs have continued to be high, as the American Blockchain community is excited about having one in the nation. However, while the excitement of having a Bitcoin ETF seems to be high amongst many in the American crypto community, JP Morgan analysts are not impressed. They believe that the impact of having Bitcoin ETFs in the country will reduce the yield on Bitcoin futures trading in the country.
Bitcoin futures trading yields higher than that of Gold and Silver
Bitcoin ETFs are products that track the value of Bitcoin while trading on a regular stock exchange instead of a crypto exchange. The Bitcoin ETFs products, which allow investors to buy Bitcoin without the need for a crypto exchange, also provide exposure to the most ignorant investor. The first two Bitcoin ETFs launched in Canada have been met with massive applause and have all been successful.
However, JP Morgan analysts believe that the high yields of Bitcoin futures trading will be hampered by the launch of a Bitcoin ETF in the country. Despite posting similarities with Bitcoin ETFs, Bitcoin futures are more popular and have few differences compared to Bitcoin ETF. Bitcoin futures allow investors to buy Bitcoin at an agreed price and speculate on the digital asset price in the future. The similarities between both products are that they both provide exposure to the investors without owning the digital assets.
However, JP Morgan analysts’ analysis shows that the Bitcoin futures market has been providing more returns than even that of fiat currencies, gold, and silver, as its 25% annual yield is unmatched by any fiat currency futures market. This has led analysts to believe that Bitcoin futures traders will be the most affected should a Bitcoin ETF launch in the country.
U.S SEC yet to show optimism towards a Bitcoin ETF
With more than $20 billion assets under its management, Grayscale Bitcoin Trust is one of the most reliable Bitcoin Trust companies in the country. However, according to the JP Morgan strategists’ analysis, the operations of Bitcoin Trusts like Grayscale will be threatened by the launch of a much anticipated Bitcoin ETF.
However, the calls for the launch of a Bitcoin ETF have been high in the U.S, as the Securities and Exchange Commission (SEC) has been adamant about licensing a Bitcoin ETF. The U.S SEC has been defiant to license any Bitcoin ETF, claiming that no one has proven that strong forces in the Blockchain space are not manipulating the crypto market.
Last month, investment firm- Van Eck filed for another Bitcoin ETF license from the U.S SEC after its previous failed attempts. The financial regulators confirmed that it would take at least 45days to decide on Van Eck’s application, and should they require more time, they will extend the review period by another 200 days.