JPMorgan warned of a US Bitcoin ETF, saying that it could crush the prices in the short-term so let’s find out more in the latest Bitcoin news today.
The strategists at JPMorgan warned of a US bitcoin ETF saying that it could negatively impact the price in the short-term. The reason for it is that an approved ETF could compete with and cause the outflow from the world’s biggest traded crypto fund Grayscale’s Bitcoin Trust monopoly which could spark outflows and slid the premium to the net asset value. This could also turn quite bearish for the BTC prices in the short-term. According to Bloomberg, strategists had previously predicted a long-term top of $146,000 that was led by Nikolaos Panigirtzoglou wrote:
“A cascade of GBTC outflows and a collapse of its premium would likely have negative near-term implications for Bitcoin given the flow and signaling importance of GBTC.”
According to this tweet, the assets under management figure for Grayscale declined by 13.7% from the record high of over $28 billion over the past week. With a change in leadership at the US Securities and Exchange Commission, a Bitcoin exchange-traded fund is more likely according to the industry observers. VanEck Associates filed with the SEC to offer one after the first one got declined. It seems that we see a little déjà vu as something similar happened after BTC futures were launched back in 2017 which coincided with the asset’s price beak back in the day.
It was widely reported that at that time in the Trump administration was not supportive of the crypto industry so they wanted to burst the bubble by approving the products of the future. The Chicago Mercantile Exchange and the Chicago Board Options Exchange launched BTC futures in December allowing institutional investors to short the assets for the first time with a year later, BTC prices crashed by 84%. Bitcoin is now trading 16% down from its all-time high late last week at $35,250 and this correction was welcomed as a strong sign of price discovery.
Many analysts warned of more declines because the previous corrections dropped by at least 30%. Anthony Pompliano said that “Bitcoin moved from weak hands to strong hands” while Microstrategy chief Michael Saylor said:
“Today confirms that Bitcoin will probably not go up at the rate of 1500% per year for more than a month at a time.”