JPMorgan anticipates a rotation of funds towards Bitcoin ETFs:
- JPMorgan anticipates a significant influx of capital from existing crypto products to new Bitcoin Spot ETFs.
- Bitcoin Spot ETFs could attract up to $36 billion, even without the entry of new capital.
- A fund migration is expected from the Grayscale Bitcoin Trust (GBTC) to Bitcoin Spot ETFs due to lower fees.
The appeal of new Bitcoin Spot ETFs
According to a report from JPMorgan, although it is uncertain how much new capital will be attracted by recently approved Bitcoin Spot ETFs, a significant rotation of funds from other crypto products to these ETFs is expected.
“We do not 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.”
said JP Morgan
The bank points out that even without the entry of new capital into 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 rotation of funds towards 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 in the coming months. Institutional investors, on the other hand, may consider transferring funds from Futures ETFs and GBTC to these new Bitcoin Spot products.
JPMorgan also notes that around $3 billion could be transferred from the Grayscale Bitcoin Trust (GBTC) to the new Bitcoin Spot ETFs. In fact, some of their investors may seek to take advantage of their GBTC shares that they previously purchased at a lower price on the secondary market.
The bank also warns about the high fees of GBTC, highlighting that this could encourage 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.”
