JPMorgan Chase (NYSE:JPM) has expressed skepticism about the recent surge in bitcoin prices and the optimistic sentiment surrounding the potential approval of spot Bitcoin ETFs. The bank's analysts noted that, despite bitcoin's impressive 38% monthly climb to $37,000 and a year-to-date increase of 122%, the approval of Bitcoin ETFs is unlikely to attract fresh capital into the market. Instead, they expect a redistribution of investments from existing Bitcoin products to any newly approved ETFs, as has been the case in Canada and Europe.
The caution from JPMorgan comes on a day when bitcoin continues to ride a bull market wave, with its price reaching notable highs. However, the bank warned that most bullish catalysts appear to have already been priced in, suggesting there might be a higher chance of a market downturn rather than continued growth.
Adding to their cautious stance, JPMorgan analysts pointed out that regulatory challenges persist in the largely unregulated crypto sector. They referenced recent comments by SEC Chairman Gary Gensler, who has consistently voiced concerns over fraud within the industry. This stance was reinforced by pro-crypto Congressman Tom Emmer, particularly in light of incidents such as the FTX fraud case, which could shape legislative perspectives on cryptocurrency regulation.
Moreover, the bank's report comes after Ripple CEO Brad Garlinghouse shared a hopeful outlook for more lenient crypto regulations following his company's legal successes against the SEC. JPMorgan, however, remains doubtful about any significant regulatory relaxation in the near future.
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