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JPMorgan: ETF grant is almost inevitable, delay is not denial

In a new note, the analysts said that the SEC has no option but to grant the applications.

JPMorgan analysts have offered an optimistic view on the grant of the spot Bitcoin ETF applications before the US Securities and Exchange Commission (SEC).

In a new note, the analysts said that the SEC has no option but to grant the applications.

ETF grant is inevitable, says JPMorgan

Following Grayscale’s win against the SEC, the SEC decided to delay the grant of the spot Bitcoin ETF applications pending before it.

However, in a new note, analysts from JPMorgan analysts, led by Nikolaos Panigirtzoglou, have said that the SEC does not have a reason to stop the grant of the applications.

According to the note, Grayscale’s win will mean that the SEC will have to withdraw its approval of the Bitcoin futures ETF to Grayscale. But such move will be “very disruptive and embarrassing for the SEC” and also highly unlikely.

Therefore, “it looks more likely that the SEC would be forced to approve the spot bitcoin ETF applications that are still pending from several asset managers, including that from Grayscale,” the analysts said.

Read more: Coinbase asks court to throw out SEC’s case for overreaching beyond authority

Delay is not denial

Last Thursday, August 31, the SEC announced its decision to delay the spot ETF applications pending before it till mid-October 2023. The SEC said it would require sufficient time to consider the proposed rule change before it.

The analysts noted that this move points more to the probable grant of the multiple approvals at once.

This postponement “likely points to approval of multiple spot bitcoin ETF applications at once rather than granting a first-mover advantage to any single applicant,” said the analysts.

“That could be beneficial for investors as it would allow for more competition in terms of ETF fees. Grayscale will likely face even bigger pressure to lower fees if its trust gets approval to be converted to the largest bitcoin spot ETF in the world,” the analysts added.

Despite the optimism, the JPMorgan analysts offered caution concerning the approval of ETFs in the US. Spot Bitcoin ETFs have been operational in Canada and Europe for some time but have failed to gain traction among investors. The analysts insisted that the benefits of spot Bitcoin ETFs are “rather marginal” compared to their futures ETF counterpart.

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