JPMorgan, through the prism of skepticism, perceives the enthusiasm that is observed in the cryptocurrency market.
A recent research report by this financial institution, which is one of the largest organizations in the structure of the banking sector of the United States, contains doubts about the hype associated with the possible approval of spot bitcoin exchange-traded funds (ETFs). This positive prospect, the implementation of which is not yet a guaranteed scenario, has caused the growth of the cryptocurrency market.
Currently, there is an opinion in the digital asset industry that the Bitcoin ETF, which can receive approval, will contribute to the growth of interest from investors. Also, within the framework of this vision of a favorable future scenario, there is a conviction that this approval will mean the victory of the cryptocurrency sector in conflict with the Securities and Exchange Commission (SEC). According to supporters of this opinion, against the background of a kind of legalization of the Bitcoin ETF, the regulator will change its attitude to virtual currencies.
Also, at present, not unfounded sentiments about the beginning victory over the SEC and the tendency of increasing resistance to counteraction from this organization are spreading in the sphere of cryptocurrencies. For example, last week, Ripple CEO Brad Garlinghouse, while talking to media representatives, said that his company’s recent litigation with the regulator is a sign that the commission has been taken under control in the United States. The specified brand won following the results of the dispute with the SEC. Brad Garlinghouse expressed hope that the result of his company will be the beginning of a global process in the United States, which will form a fair perception of the cryptocurrency industry, which has a huge potential for prosperity in the world’s largest economy. The CEO of Ripple also rebuked the SEC for not meeting the mission to protect investors.
JPMorgan analysts disagree with the optimistic vision of the future of sphere cryptocurrencies. In their opinion, the most likely scenario for further development of the processes will be the transition of existing funds from current bitcoin products to ETFs and not the emergence of new capital invested in the digital currency. Analysts of one of the largest financial institutions in the United States drew attention to the fact that ETFs have not attracted significant interest from investors in Canada and Europe since its appearance in these regions.
JPMorgan representatives also noted that the SEC’s defeats following the results of court proceedings with representatives of the cryptocurrency industry are not a guarantee that in the future the concept of regulating this sphere will be relaxed. In this context, the bank’s analysts note that the virtual currency sector currently has a level of regulation that clearly does not suit the authorities.
JPMorgan experts said that the strategy of state control over the cryptocurrency industry in the United States is still being discussed, and they do not believe that American lawmakers will change their rather tough approach to this issue, given the relatively recent memories of fraud related to FTX.
