The CEO of JP Morgan recently tore into Bitcoin, comparing it to tulip bulbs. However, that seems to have changed after further analysis. When talking to its clients about the potential benefits of Bitcoin EFTs, the megabank referred to them as the Holy Grail. This statement was made at a time when the market cap of the crypto market has far exceeded that of JPMorgan itself.
The Various Benefits of Bitcoin ETFs
According to a report by Business Insider, JPMorgan informed its clients that there were numerous benefits to investing in Bitcoin ETFs. According to JPMorgan, some of the benefits include:
- Easier access – To invest in Bitcoin, one needs a wallet. This makes these coins inaccessible to some. However, ETFs are frequently traded and are easy to access via a brokerage account.
- Liquid market – ETFs are highly transparent and actively traded.
- High level of integrity – ETF trading takes place via brokerage accounts, which are insured via SIPC. On Bitcoin exchanges, there is no such insurance, which exposes the holders to theft and potential fraud.
The bank further added that the Bitcoin ETF “could have a transformational impact on the cryptocurrency”. The bank went further and likened the ETF to the impact of gold-based ETFs on the financial markets.
Crypto Is Important for Portfolio Diversification
The report by JPMorgan showed how its understanding of crypto has changed in the last few weeks. For instance, the report states that crypto could be important assets in helping customers diversify their portfolio.
Although the migration to Bitcoin futures is a recent occurrence, it has helped to grow the legitimacy of such products. In fact, the bank believes that the Bitcoin futures could help to drive the approval of Bitcoin ETFs by the SEC.
When the Bitcoin futures were launched in December 2017 by CBOE, they helped to elevate the digital currency to mainstream status. Most experts now believe that set the stage for the launch of Bitcoin ETFs. Most financial institutions are now trying to get SEC approval for the launch of these ETFs.
At the time of writing, the market cap of crypto is around $418 billion. This is much greater than the market cap of JPMorgan Chase. Most crypto investors hope that once banks begin to understand the huge potential that digital currency holds, they will change their minds. Thus, they will stop banning the use of their credit cards for the purchase of digital currencies. They also hope it will cause banks to abandon practices that are unfair to digital currency investors.
If the banks can be persuaded to drop their hostile stances on crypto, it would aid Bitcoin ETF approval by the SEC. Most believe that once the approval by the SEC goes through, it could propel the value of Bitcoin to new heights.
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