JPMorgan, Coinbase Expect a Bitcoin ETF Approval in Coming Months

Optimism around a spot Bitcoin exchange-traded fund (ETF) is growing as Coinbase and JPMorgan Chase recently said they expect approval for the instrument.

A Spot Bitcoin ETF Approval Is Imminent

The Wall Street giant, JPMorgan recently stated it expects the Securities and Exchange Commission's (SEC) approval for the instrument in the next few months. Although the timing of the approval is unclear, it might come before January 10, 2024, the final deadline for the Ark 21Shares applications, according to JPMorgan's analyst, Nikolaos Panigirtzoglou.

Coinbase's Chief Legal Officer, Paul Grewal, told CNBC: "I'm quite hopeful that these [ETF] applications will be granted, if only because they should be granted under the law."

A spot Bitcoin ETF will be listed on mainstream stock exchanges, allowing retail investors to buy and sell them, similar to listed stocks and from the same brokerage account. This will significantly reduce the entry barrier, as retail investors can have exposure to Bitcoin without holding them directly.

Growing Optimism

The latest optimism came as a US court recently ruled that the securities regulator does not have the authority to deny the bid of digital asset management Grayscale to convert its GBTC Bitcoin Fund into an ETF. The GBTC Bitcoin Fund has an asset under management of about $17.9 billion as of press time.

The SEC also decided not to pursue an appeal against the court decision, pointing at more hopes for the approval of a Bitcoin ETF.

Companies have been pushing for the approval of a spot Bitcoin ETF for years now. However, optimism grew as BlackRock, the largest asset management company, filed for a Bitcoin ETF earlier this year. Companies like Invesco and WisdomTree also followed Black Rock's lead to refile their applications.

"I think that the the firms that have stepped forward with robust proposals for these products and services are among some of the biggest blue-chips in financial services," Grewal added.

"So that, I think, suggests that we will see progress there in short order."