The United States Securities and Exchange Commission (SEC) keeps delaying its approval for a Spot Bitcoin ETF. For those who don't know what a Spot BTC ETF is, you can read about it here, but the short version is that it's simply making Bitcoin available on the US Stock Market in a form where people can buy it without having to hold it in wallets themselves.

This was just in, though:

January 5 to 10 seems to be the deadline, which means the SEC would have to approve or reject all the ETF applications by then. Major analysts see no reason why they would reject, so it is almost certain these ETFs would be approved by then.

This would be something very huge for BTC and the Cryptocurrency markets in general, as Bitcoin would become exposed to millions of traditional investors on the US Stock Market who would most likely put in some money to buy Bitcoins through the ETF as it would be easier to buy and store, and it is now on a market they know/understand.

However, as good as this seems, and as much hype as it has brought, there are still some who think the approval of this ETF wouldn't do much to the price of Bitcoin. I actually made a post where I argued that it wouldn't be as good for the price as we think, so clearly I have my own reservations.

But recently I went out to look for more reasons why it might not be as good for the price as most people think, and the major doubter I saw was the bank, JPMorgan Chase. These are the reasons they think the approval wouldn't do much for the BTC price:

1. Greyscale, one of the companies applying for the ETF already has a Bitcoin Trust called GBTC (This trust is simply a way to buy Bitcoin without holding or storing it. It's just that it is not on the Stock Market like ETFs would be). So, JPMorgan believes that once the ETF is approved many investors in this Trust would sell to take profits because that's what most of them bought it for, to profit off the ETF hype. JPMorgan sees $2.7 billion leaving due to this, and this is going to impact BTC price negatively.

2. Bitcoin Spot ETFs already exist in Canada and Europe, and have gained “little interest from investors since their inception".

Tearing these Reasons Apart

1. I'd agree, firstly, that this seems like some good analysis that deserves a thumbs up. But it only looks at how much might leave and not how much might come in. If the amount coming in is way about the amount leaving, then the amount leaving becomes insignificant.

CryptoQuant, a Blockchain/Cryptocurrency analysis company has done its own analysis on the amount expected to enter the market if the ETF is approved and the amount is $1.08 trillion. Now, what is $2.7 billion compared to that?

Of course, it's all speculation, and it's not certain how much would come in or leave, but the fact remains that we can't speculate about the money leaving without talking about the money coming in, because the money coming in is what determines whether the money leaving would have any effect at all. They both go hand in hand.

2. Their second reason is the funniest of all. It's quite a shame that this is the best JPMorgan can come up with. My opinion is probably nothing when standing next to that of the Giants JPMorgan, but the entire focus should be on logic and not whose opinion it is.

Europe and Canada are not the USA. We can't expect things to go the same way in the USA as they did in those places. For example, how much of a hype was it when ETFs were approved in those places? Of course, very little hype, and few people even heard of it. But you see how much hype it is now that the USA is considering approving theirs.

USA has the largest Stock Market in the world, and according to Statista: "in 2023, stock markets in the United States accounted for nearly 60 percent of world stocks". So, why compare a listing in the USA to a listing in Canada and Europe?

Conclusion

Some are saying JPMorgan only said these things to reduce the hype and make people not rush in to buy now, because if people rushed in, the price would increase and they (JPMorgan) wouldn't be able to buy as much as they want with the current lower price. This makes quite a lot of sense to me. We can't be sure, but it really seems so.

You can read about what JPMorgan said here and here.

[Cover Image created by yours truly]