The long awaited spot Bitcoin Following the approval of its ETFs by the SEC, the cryptocurrency market recorded a significant correction. The broad optimism surrounding the launch of the products and the anticipated major corporate penetration did not materialize.
Following the launch of ETFs last week, a prediction made by JPMorgan analysts was among the important reports that attracted attention. In a note sent to clients, lead analyst Nikolaos Panigirtzoglou argued that spot Bitcoin ETFs would attract inflows of up to $36 billion in the weeks following their debut.
Contrary to popular opinion, JPMorgan analysts Bitcoin ETFThey objected to the idea that the ‘s would see “too much fresh capital.” Instead, they predicted that the $36 billion would largely come from existing crypto funds like Grayscale’s popular GBTC product, which would turn into an ETF in a turning point for the digital asset industry.
In line with estimates, public data shows an outflow of over $579 million from Grayscale’s GBTC as investors abandoned the fund for products offering relatively lower management fees. Others may have exited GBTC to profit by gaining exposure to Bitcoin at a discounted price before the fund was converted into an ETF.
Analysts with Grayscale and JPMorgan, which has set its management fee at 1.5% annually, warn that there could be significant outflows from the fund (between $5 billion and $10 billion) unless it lowers fees to new industry standards. Most newly launched spot Bitcoin ETFs offer management fees between 0.2-0.4%, an option that is significantly lower than Grayscale’s.
Meanwhile, JPMorgan analysts also expect existing crypto investors to prefer exposure to BTC through ETFs rather than traditional crypto exchanges. Therefore, they estimate that approximately $20 billion will also flow from exchanges to new launches, pushing the projected inflow into spot Bitcoin ETFs closer to the predicted $36 billion range.