JPMorgan Foresees a Shift in Funds Toward Bitcoin ETFs
JPMorgan anticipates a significant influx of capital from existing crypto products to the new Bitcoin Spot ETFs.
The Bitcoin Spot ETFs could attract up to $36 billion, even without new capital entering.
A fund migration is expected from the Grayscale Bitcoin Trust (GBTC) to the Bitcoin Spot ETFs due to lower fees.
The Appeal of the New Bitcoin Spot ETFs
According to a JPMorgan report, while it is uncertain how much new capital the recently approved Bitcoin Spot ETFs will attract, a significant fund rotation from other crypto products to these ETFs is expected.
“We don’t know exactly how much new capital the new Bitcoin exchange-traded funds (ETFs) will attract, but significant funds from other cryptographic products are expected to flow in.”JP Morgan stated
The bank emphasizes that even without new capital entering the cryptocurrency market, these new ETFs could attract inflows of up to $36 billion. This forecast is based on the analysis of current market movements and investor trends.
A Capital Rotation to the New Bitcoin Spot ETFs
The investment bank estimates that up to $20 billion could be redirected by individuals from crypto exchanges to the new ETFs over the coming months. Institutional investors, on the other hand, may consider transferring their funds from ETF Futures and GBTC to these new Bitcoin Spot products.
JPMorgan also notes that approximately $3 billion could be transferred from the Grayscale Bitcoin Trust (GBTC) to the new Bitcoin Spot ETFs. Indeed, some of their investors may seek to take advantage of their GBTC shares, which they previously purchased at a lower price on the secondary market.
The bank also warns of the high fees of GBTC, highlighting that this could prompt investors to turn away from GBTC in favor of the new Bitcoin Spot ETFs. A reduction in fees could prevent a migration of “an additional $5 to $10 billion.”
