10 bitcoin-linked ETFs are waiting in regulatory limbo,
according to JPMorgan.
The bank described such a fund as the “holy grail” for
It’s not clear if or when a bitcoin-linked
exchange-traded fund will go live, but it is clear that such a
fund would be a game-changer for the digital currency.
A bitcoin ETF has been viewed as a natural next step in bitcoin’s
maturation as an asset and could precipitate the entrance of more
retail investors into the crypto market.
JPMorgan outlined the benefits of such a fund in a note out to
clients on Friday, referring to it as the “holy grail for owners
and investors.” Here’s the bank:
- Easier access: “Investors need wallets to
trade the physical Bitcoins today, making it hard to access.
ETFs are frequently traded and highly accessible via investors’
- Liquid market: “ETFs are actively traded
and highly transparent.”
- High integrity: “ETFs are traded through
brokerage accounts that carry with them insurance via SIPC.
Bitcoin exchanges have no such insurance and expose holders to
potential fraud and theft.”
However, the idea of a bitcoin ETF has received push-back from
regulators who want to evaluate the potential risk they could
present to investors. In response to that pushback, at least
five companies have withdrawn their applications for a bitcoin
ETF. As many as 10 bitcoin-linked ETFs are sitting in regulatory
limbo, waiting for approval.
Such a product could have a transformational impact on the
cryptocurrency. JPMorgan said that impact could resemble the
impact of the first gold-linked ETF.
“Launched in 2004, SPDR Gold Shares ETF was the first gold ETF
approved in the US by the SEC,” the bank said.
“Since its launch, retail access to gold has skyrocketed as new
investors more easily turn to the gold market as a portfolio
diversifier and as a foundational asset.”
After the launch of the SPDR fund, the price of gold skyrocketed
from $440 to a peak of $1,900 in 2011, the bank said.
“Today, the SPDR Gold Shares ETF is one of the biggest ETFs in
the market with over $35 billion under management,” JPMorgan
That’s probably why we’ve seen a race by firms to launch their
own bitcoin ETF, as the first mover advantage could ultimately
translate into a fund’s long term success.
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