Summary List PlacementApproval of a bitcoin exchange-traded fund in the US could pull investors out of a popular trade and erode a key support of the cryptocurrency’s lofty price, JPMorgan strategists said Friday.
Institutional investors largely invest in the Grayscale Bitcoin Trust for regulatory reasons instead of directly buying bitcoin. But the trust touts a premium to the underlying token.
The Securities and Exchange Commission is expected to authorize a bitcoin ETF in 2021. The introduction of such a fund could drive institutional investors out of Grayscale’s trust and cut into the premium.
While outflows from Grayscale’s trust could present a near-term pressure for bitcoin prices, JPMorgan still expects bitcoin ETFs to benefit the cryptocurrency in the longer term.
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The introduction of a bitcoin exchange-traded fund in the US is likely to pull investors out of a popular buying option and create a…