JPMorgan Warns Approval of Spot Bitcoin ETFs Could Put Downward Pressure on Prices

JPMorgan Analyst Predicts Potential Impact on Bitcoin Price

JPMorgan, a global investment bank, has issued a cautionary statement regarding the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). According to the bank's analysts, such approval could result in "severe downward pressure on bitcoin prices." They estimate that the crypto market could experience a significant outflow of funds if Grayscale Investments converts its bitcoin trust (GBTC) into a spot bitcoin ETF.

Nikolaos Panigirtzoglou, an analyst at JPMorgan, shared his predictions on the potential impact of SEC-approved spot bitcoin ETFs on the price of bitcoin in a recent LinkedIn post. While expressing his belief in the imminent approval of spot bitcoin ETFs by the SEC, he also raised concerns about the potential capital outflow from the Grayscale Bitcoin Trust (GBTC) as it transitions into a bitcoin ETF.

Panigirtzoglou explained that many investors have purchased a significant number of GBTC shares in the secondary market at deep discounts to NAV (net asset value) in anticipation of its conversion to an ETF. These speculative investors are expected to take profit once GBTC is converted to an ETF and the discount to NAV is eliminated. The analyst estimates that around $2.7 billion could be withdrawn from GBTC as a result of this conversion.

In terms of market impact, if the entire $2.7 billion were to exit the bitcoin space, it would undoubtedly exert severe downward pressure on bitcoin prices. However, Panigirtzoglou believes that most of this outflow would likely shift into other bitcoin instruments, such as the newly created spot bitcoin ETFs, after SEC approval. Nonetheless, he maintains that the balance of risks for bitcoin prices tilts towards the downside, as a portion of the $2.7 billion is expected to completely leave the bitcoin space.

Panigirtzoglou also highlighted the potential impact of the recent Binance settlement with the U.S. Department of Justice (DOJ), the Treasury, and other federal agencies on the crypto industry. He stated that the settlement reinforces the ongoing shift towards regulated crypto entities and instruments, which has been the objective of U.S. authorities since the collapse of FTX.

According to Panigirtzoglou, this shift towards regulated crypto entities and instruments is positive for the crypto ecosystem, as increased regulation will attract the interest of traditional market participants and investors. He noted the participation of major traditional asset managers, such as Blackrock and Fidelity, in the forthcoming approval of physical or spot bitcoin ETFs by the SEC, which aligns with this trend.

What are your thoughts on JPMorgan's analysis of the price impact of spot bitcoin ETFs? Share your opinions in the comments section below.

Frequently Asked Questions

What is the best precious metal to invest in?

This question is dependent on the amount of risk you are willing and able to accept as well as the type of return you desire. Although gold has been considered a safe investment, it is not always the most lucrative. If you are looking for quick profits, gold might not be the right investment. If you have time and patience, you should consider investing in silver instead.

If you're not looking to make quick money, gold is probably your best choice. If you want to invest in long-term, steady returns, silver is a better choice.

How to Open a Precious Metal IRA?

First, you must decide if your Individual Retirement Account (IRA) is what you want. Once you have decided to open an Individual Retirement Account (IRA), you will need to complete Form 806. Then you must fill out Form 5204 to determine what type of IRA you are eligible for. You must complete this form within 60 days of opening your account. Once you have completed this form, it is possible to begin investing. You may also choose to contribute directly from your paycheck using payroll deduction.

For a Roth IRA you will need to complete Form 8903. Otherwise, the process will be identical to an ordinary IRA.

To be eligible to have a precious metals IRA you must meet certain criteria. The IRS stipulates that you must have earned income and be at least 18-years old. You can't earn more than $110,000 per annum ($220,000 in married filing jointly) for any given tax year. Contributions must be made on a regular basis. These rules apply to contributions made directly or through employer sponsorship.

A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. However, you can't purchase physical bullion. This means you won't be allowed to trade shares of stock or bonds.

You can also use your precious metals IRA to invest directly in companies that deal in precious metals. Some IRA providers offer this option.

There are two main drawbacks to investing through an IRA in precious metallics. First, they are not as liquid or as easy to sell as stocks and bonds. This makes them harder to sell when needed. Second, they don't generate dividends like stocks and bonds. Also, they don't generate dividends like stocks and bonds. You will eventually lose money rather than make it.

Is physical gold allowed in an IRA.

Gold is money. Not just paper currency. Gold is an asset people have used for thousands years as a place to store value and protect their wealth from economic uncertainty and inflation. Investors use gold today as part of their diversified portfolio, because it tends to perform better in times of financial turmoil.

Today, Americans prefer precious metals like silver and gold to stocks and bonds. While owning gold doesn't guarantee you'll make money investing in gold, there are several reasons why it may make sense to consider adding gold to your retirement portfolio.

One reason is that gold historically performs better than other assets during financial panics. The S&P 500 declined 21 percent during the same period. Gold prices increased nearly 100 per cent between August 2011 – early 2013. Gold was one of the few assets that performed better than stocks during turbulent market conditions.

One of the best things about investing in gold is its virtually zero counterparty risk. Your shares will still be yours even if your stock portfolio drops. Gold can be worth more than its investment in a company that defaults on its obligations.

Finally, the liquidity that gold provides is unmatched. This means you can easily sell your gold any time, unlike other investments. Gold is liquid and therefore it makes sense to purchase small amounts. This allows one to take advantage short-term fluctuations within the gold price.

Is buying gold a good retirement plan?

Buying gold as an investment may not seem very appealing at first glance, but when you consider how much people spend on average on gold per year worldwide, it becomes worth considering.

The best form of investing is physical bullion, which is the most widely used. There are other ways to invest gold. Research all options carefully and make an informed decision about what you desire from your investments.

If you don’t have the funds to invest in safe places, such as a safe deposit box or mining equipment companies, buying shares of these companies might be a better investment. If you need cash flow to finance your investment, then gold stocks could be a good option.

ETFs are an exchange-traded investment that allows you to gain exposure to the market for gold. You hold gold-related securities and not actual gold. These ETFs usually include stocks of precious metals refiners or gold miners.


  • The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (
  • (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (
  • Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (
  • This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (
  • Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (

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How To

How to Hold Physical Gold in an IRA

The best way of investing in gold is to purchase shares from companies that produce gold. However, this method comes with many risks because there's no guarantee that these companies will continue to survive. Even if they do survive, there is still the possibility of losing money to fluctuating gold prices.

Another option is to purchase physical gold. You'll need to open a bank account, buy gold online from a trusted seller, or open an online bullion trading account. This option offers the advantages of being able to purchase gold at low prices and easy access (you don’t need to deal directly with stock exchanges). It's easier to track how much gold is in your possession. You'll get a receipt showing exactly what you paid, so you'll know if any taxes were missed. There's also less chance of theft than investing in stocks.

There are also some drawbacks. Bank interest rates and investment funds won't help you. Additionally, you won’t be able diversify your holdings. You will remain with the same items you bought. Finally, the tax man might ask questions about where you've put your gold! has more information about how to buy gold in an IRA.


By: Kevin Helms
Title: JPMorgan Warns Approval of Spot Bitcoin ETFs Could Put Downward Pressure on Prices
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Published Date: Sun, 26 Nov 2023 02:30:10 +0000

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