The euphoria from running BTC ETFs will be short-lived, according to JP Morgan.
JP Morgan: Launching BTC ETFs will not bring in new money
Investors have switched from gold ETFs to BTC ETFs because they see them as a better hedge against inflation, according to the bank’s note. JP Morgan analysts write:
“The launch of BITO alone is unlikely to launch a new phase in which significantly more fresh capital enters BTC. Instead, we believe that the perception of BTC as a better hedge of inflation than gold is the main reason for the current rise, and this has been supporting the shift from gold ETFs to BTC funds since September. ”
JP Morgan also looks back at what happened in Canada: “When the first BTC ETF was launched, it was very successful. Then, after the initial phase of the purchase, the enthusiasm waned. The same could happen, if it hasn’t already happened, with BTC ETFs in the United States. “
In fact, JP Morgan did not announce anything new. BTC has long proved to be an excellent hedge against inflation. The success of BTC ETFs shows that institutional investors were just waiting for the next one. After all, in the first two trading days, Proshares’ ETF volume, BITO, reached $ 1 billion. At the same time, the price of BTC reached a new all-time high of almost $ 67,000.
After falling over the weekend, BTC is back at $ 63,000, ready to break the previous record of October 20.
More ETFs are entering the market
Meanwhile, other ETFs based on BTC futures are entering the market. However, according to Yahoo Finance analysts, ProShares will have a significant first-mover advantage.
Jon Wolfenbarger, an analyst and founder of the investment site Bull And Bear Profits, said:
“With the ETF, there are significant economies of scale. The advantage of the first move is powerful. “
Referring to the case of actively managed blockchain-based ETFs, BLOK and BLCN, it should be noted that they were launched one day after another and a week before two other competing funds, LEGR and KOIN. And today:
“BLOCK manages 75% of the total assets between these four ETFs.”
It is true that Valkyrie’s debut was not the best because it hit the bear market with BTC, as did the ProShares ETF, but given their fees, which are set at 0.95%, they have clear advantages over Grayscale, which has set fees at 2%, namely could support further growth.