Analyzing Bitcoin ETF
Analysts at the US financial giant JP Morgan are currently saying that there is a possibility that not many new funds will flow into the newly launched crypto asset (virtual currency) Bitcoin (BTC) spot ETF (exchange traded fund) in the US. I realized that I was watching. “The Block” reported.
J.P. Morgan analysts said they doubt that the optimism about a large influx of new money is shared by many market participants. On the other hand, it is predicted that up to 5.2 trillion yen ($36 billion) of funds will be transferred from existing virtual currency financial products.
JP Morgan has long expressed a similar view. While the U.S. Securities and Exchange Commission (SEC) predicted it would approve a Bitcoin spot ETF, it said it would become a zero-sum game simply by draining liquidity from other products such as Bitcoin futures. They argued that it was unlikely to be a turning point in the market.
connection: JP Morgan analyst: “SEC will have no choice but to approve Bitcoin spot ETF”
In addition to expressing the same view as that time, JPMorgan analysts have now estimated the amount of money that will move into Bitcoin spot ETFs. First, he predicted that approximately 435 billion yen ($3 billion) would flow into the Bitcoin futures ETF.
In addition, the transition from Grayscale’s “GBTC” is calculated to be from about 435 billion yen to about 1.8 trillion yen ($13 billion). Although GBTC has recently been converted into an ETF, it has been in the market for some time, and there is a view that investors who purchased it at a discount (negative deviation) have taken profits.
What is GBTC?
Originally, it was a “Bitcoin investment trust” provided by Grayscale in the US. When the SEC approved the listing of multiple spot ETFs, it also allowed GBTC to be converted into a spot ETF.
▶️Virtual currency glossary
connection:What is Grayscale’s investment trust “GBTC”? Why is the price discrepancy with spot Bitcoin attracting attention?
It is also estimated that approximately 2.1 trillion yen ($15 billion) to 2.9 trillion yen ($20 billion) will flow into the market from exchanges and brokers used by individual investors. On the other hand, although it cited these examples as sources of funds transfer, it did not mention when or how long the funds would flow.
Analysts at JPMorgan noted that the amount of new money flowing into the crypto market will be influenced by regulation. In particular, he said it will depend on how much regulators allow the crypto ecosystem to penetrate the traditional financial system.
They also argue that how much money flows into newly created ETFs will be heavily influenced by fees and liquidity.
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Fund outflow from GBTC
Bitcoin spot ETFs were approved for the first time in the United States on the 11th Japan time, and trading has already begun.
Grayscale ETF had the highest volume on the first day. Meanwhile, as mentioned above, Bloomberg ETF expert Eric Balchunas speculated that the bulk of the volume was all selling.
connection: Bitcoin spot ETF trading volume on first day exceeds $4 billion, led by Grayscale
JP Morgan points out that GBTC has a high fee of 1.5%. He states that unless fees are lowered to the same level as BlackRock and others, around 0.25%, funds will flow out as mentioned above.
connection: U.S. companies applying for Bitcoin spot ETFs face fee competition