Bitcoin ETF could smash the price of tokens in the short-term

  • The approval for Bitcoin ETF can possibly bring a decline in the price of Bitcoin in the short-term
  • The ETF can also possibly diminish the monopoly of Grayscale’s Bitcoin Investment Trust (GBTC).
  • After the launch of Bitcoin Futures, a similar fall in the price of Bitcoin was observed previously also

JPMorgan analysts are warning that the Bitcoin exchange-traded fund (Bitcoin ETF) could potentially negatively affect the price of the token in a shorter time frame. According to the analysts, the price will only be affected in the shorter time frame, and remain positive in the longer one. The negative trend in the price of the leading crypto token can be witnessed due to the transfer of the funds to Wall Street from the Grayscale Bitcoin Trust, which could lead the token to gain exposure in the sector.

The Bitcoin ETF could diminish the GBTC monopoly

As the analysts have claimed the negative trend, it is observed that the reason behind the trend would be the potentiality of the Bitcoin ETF. It is found that the ETF has the potential to cause an outflow from the world’s largest traded digital currency fund, GBTC. The analysts have suggested that the ETF would diminish the GBTC’s effective monopoly, which could also potentially turn the bullish mood of Bitcoin to bearish in the short term. The analysis was led by Nikolaos Panigirtzoglou, who also predicted that the price of the leading cryptocurrency would achieve the level of $146,000 in the longer time frame. 

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According to Nikolaos, a cascade of Grayscale trust’s outflows and a collapse in its premium can be expected soon, which will be the implication of the approval of the Bitcoin ETF.

Similar momentum was observed after the launch of BTC futures

Observing the scenario, it is found that something similar did happen when BTC futures were introduced back in 2017 after the price of Bitcoin first bubbled to $20,000. Since the time Trump took the US presidential office, the administration and laws have never been supportive of the crypto sector, and they wanted to burst the bubble by introducing BTC futures. On the other hand, it was also observed after the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE), launched the futures option, the price of Bitcoin crashed by more than 80% in just a year.

GBTC’s management figure is already declining

Recently, Grayscale has revealed via a tweet, that in the late last week, compared with the all-time high figure of the total assets under management held by GBTC, at $28 billion, has declined by more than 13%. However, this decline in the price of Bitcoin came recently after the chairperson of the US SEC approved the Bitcoin ETF. 

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Ahtesham Anis
Ahtesham Anis is a Computer Science undergrad student currently based out of India. Coming from the business background and his keen interest in Cryptocurrency and Blockchain technology is what Ahtesham brings to the table. He is always an eager learner when it comes to exploring the new technologies and topics in the crypto world.

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