The experts at JPMorgan predict a moderate further decrease in the value of Bitcoin, as profit-taking operations on GBTC seem to have mostly concluded.
However, despite the positive outlook, analysts warn that Grayscale Bitcoin Trust (GBTC) may continue to experience fund outflows. This unless it reduces fees in the near future.
Let’s see below all the details.
JPMorgan: stabilizing trend in the crypto market after Grayscale Bitcoin Trust operations
As anticipated, according to JPMorgan, the downward pressure on the price of Bitcoin has been mitigated following the significant closure of profit-taking operations on Grayscale Bitcoin Trust (GBTC).
The conversion of GBTC into a spot Bitcoin exchange-traded fund has resulted in outflows of $4.3 billion in the last two weeks. Thus surpassing JPMorgan’s estimates of around $3 billion.
The analysts, led by Nikolaos Panigirtzoglou, have highlighted that most of the profit-taking on GBTC seems to have already occurred.
This therefore indicates that the downward pressure on Bitcoin resulting from this channel should be largely overcome.
Despite the recent 20% decrease in the price of Bitcoin following the approval of Bitcoin spot ETFs in the United States, analysts believe that the worst is now behind us.
However, they warn that if GBTC does not reduce its 1.5% fee in the short term, it may continue to experience outflows of funds and lose market share to emerging competitors like BlackRock and Fidelity.
These last ones have attracted respectively 1.9 billion dollars and 1.8 billion dollars of inflows. Furthermore, they boast significantly lower fees, only 25 basis points (without exemptions) compared to GBTC’s 150 basis points.
Considerations on Bitcoin ETFs in the USA according to JPMorgan analysts
Furthermore, JPMorgan analysts believe that the recent introduction of spot Bitcoin ETFs in the United States represents a significant evolution in Bitcoin price determination.
In particular, aligning it with traditional markets, especially in stocks, where ETFs are common.
They indeed claim that, despite an apparent initial fragmentation, the inclusion of spot Bitcoin ETFs could, in practice, improve market depth and liquidity.
Following the positive experience of ETFs in traditional asset classes such as stocks.
In other words, analysts expect the emergence of Bitcoin spot ETFs to make the Bitcoin price discovery process more efficient, rather than less.
Finally, analysts conclude that the approval of Grayscale Bitcoin Trust’s (GBTC) plan to introduce a covered call ETF would be a significant boost for the fund and the Bitcoin derivatives markets.
News from Bitwise for the Bitcoin ETF sector in the USA
Bitwise is leading a major change in the cryptocurrency industry. Specifically, positioning itself as the first spot Bitcoin ETF in the United States to publicly authenticate its onchain BTC reserves.
This innovative move follows the revelations of Arkham Intelligence on the BTC holdings of key industry players. Furthermore, it represents a significant step towards greater transparency and trust in the management of digital assets.
The recent disclosure by Bitwise of the bitcoin addresses associated with its BITB ETF allows for direct verification on the blockchain of holdings and flows. This is in line with the fundamental principles of transparency of Bitcoin.
This not only sets a new standard in the industry, but also joins a trend among centralized exchanges that enhance proof of reserve attestations. Particularly relevant after the recent collapse of FTX.
The Bitwise portfolio, known as “1CKVs”, currently holds 11,858.63 BTC, with a value of approximately $470.74 million, ranking as the 71st richest bitcoin address.
This bold move could influence other spot Bitcoin ETFs to follow suit and adopt similar transparency measures.
The Bitwise initiative reflects the growing commitment of the industry towards greater transparency. A crucial aspect in light of the recent turbulence in the cryptocurrency market.
With the evolution of the sector, it is possible that more and more companies will adopt real-time cryptographic attestations and other transparent measures. Thus contributing to establish new standards to ensure investor confidence in the cryptocurrency market.