According to investment bank analysts, Spot BTC exchange-traded funds launched on January 11 will not attract a significant amount of new capital.
The Block writes that JPMorgan assessed the possible flow of funds into new spot Bitcoin ETFs from other existing cryptocurrency instruments. The launched funds will not attract a significant amount of new capital. Still, bank analysts believe $36 billion could flow into them from cryptocurrency accounts on exchanges, futures ETFs, and other crypto products.
On the evening of January 10, the US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs. The trading volume of Bitcoin ETF shares on the first day exceeded $4.6 billion.
JPMorgan believes that about $3 billion could flow into spot Bitcoin ETFs from Bitcoin futures ETFs, between $3 billion and $13 billion from the Grayscale Bitcoin Trust, and up to $15–20 billion from retail investor accounts on crypto platforms. Analysts did not specify the period during which this could happen.
“We believe the amount of new capital flowing into the cryptocurrency space will likely depend on regulation and, in particular, how many opportunities for the cryptocurrency ecosystem emerge from the traditional financial system over time,” the bank said.
Analysts said fees and liquidity will likely play a key role in how much money flows into newly launched ETFs. According to them, Grayscale’s GBTC could face outflows of $5-10 billion if it does not reduce fees from 1.5 to 0.25%, like BlackRock and other ETF issuers. In addition, speculative investors will likely profit from GBTC units purchased at a deep discount on the secondary market in 2023 and move about $3 billion into newly created spot ETFs.
The bank also believes retail investors will likely transfer some of their funds to spot Bitcoin ETFs from crypto exchanges and brokerage services. And institutional investors can switch to spot Bitcoin ETFs from futures ETFs with low fees.
Last December, JPMorgan experts predicted that in 2024, Ethereum would surpass Bitcoin in growth rates. Amid the launch of spot Bitcoin ETFs, speculation about the approval of exchange-traded funds on Ethereum has already caused an increase in the price of the leading altcoin.
