In a recent analysis, JPMorgan Chase (NYSE:JPM) analysts look into the crypto market surge, fueled by expectations of SEC approval for spot Bitcoin ETFs. As Bitcoin’s value surges beyond $36,000, approaching $37,000, analysts express concerns about investor optimism.
The analysts challenge the perception that SEC approval will lead to a relaxed regulatory approach, citing the largely unregulated nature of the crypto industry. They anticipate that new ETFs may reallocate existing capital rather than attracting fresh funds, pointing to subdued interest in non-U.S. Bitcoin ETFs as a potential indicator.
Despite legal victories for Ripple XRP/USD and Grayscale against the SEC, JPMorgan remains cautious about anticipating a substantial regulatory reversal. Pending U.S. crypto regulations and memories of FTX fraud contribute to this cautious stance.
The team notes the impact of the forthcoming April halving cycle on crypto markets, but they believe it is already factored into bitcoin’s current value. With historic levels of bitcoin hoarding and future supply pressure, any price hikes from the 2024 Bitcoin halving event are considered pre-factored into the market.
Market dynamics take a further turn as the SEC negotiates with Grayscale about converting its BTC fund into a spot Bitcoin ETF. JPMorgan analysts predict these funds may draw from existing bitcoin investments rather than attracting new capital, expecting a relative value trade.
As the crypto market continues to evolve, JPMorgan’s insights shed light on the complexities and potential outcomes tied to regulatory developments and market dynamics.
