According to cryptocurrency news outlet The Block, JPMorgan recently bitcoin-etf-sec-lawsuits” target=”_blank” rel=”noopener nofollow”>heavy en, among voices navigating the crypto space, suggesting possible legal repercussions if the US Securities and Exchange Commission (SEC) rejects applications for spot bitcoin exchange-traded funds (ETFs).
In particular, the implications of the SEC’s decisions on crypto ETFs are enormous and affect both institutional and retail investors. Recent JPMorgan analysis provides insight into what could happen if the SEC rejects bitcoin ETF proposals, which could trigger a series of legal confrontations with applicants.
bitcoin ETF Legal Repercussions Await SEC?
JPMorgan analysts, led by Nikolaos Panigirtzoglou, highlighted in a recent report that a refusal by the SEC to approve one-time bitcoin ETF applications could prompt legal action.
The report posited that such rejections could pave the way for lawsuits against the US SEC, further “complicating” the regulatory environment. While the likelihood of rejection remains uncertain, Panigirtzoglou, in the conversation, stated:
We believe that a new legal battle over the issue of bitcoin spot ETF approval is not something the SEC is willing to face again.
These JPMorgan forecasts come on the heels of its prediction last week, where the institution bitcoin-etf-in-next-few-months-jpmorgan/” target=”_blank” rel=”noopener nofollow”>anticipated multiple bitcoin ETF spot approvals in the coming months.
The banking giant also recognized the progress made by asset managers in their engagements with the SEC. These include technical preparations and revised presentations that address concerns such as possible “market manipulation” and “commingling of client funds,” according to the report.
The institutional rise of bitcoin
Digging deeper into the report shows that the recent surge in bitcoin‘s performance is not “just another” rally driven by individual enthusiasts. The JPMorgan analyst particularly points this time to a different catalyst: institutional demand.
The analyst revealed that his change is evident when comparing the futures position indicator anchored in CME bitcoin futures, an instrument predominantly leveraged by institutional investors.
According to the JPMorgan analyst, the data reveals a marked increase over the past week, reaching not only the peak of the year but also levels reminiscent of those before the FTX collapse in August 2022. On the contrary, the position indicator of Comparable futures for CME ethereum futures remains relatively apathetic.
Corroborating the institutional momentum behind bitcoin, the JPMorgan analyst also noted significant inflows into larger bitcoin portfolios, a trend that emphasizes institutional demand.
While this was being reported, bitcoin retraced some of its bullish momentum, recording a 3.2% drop over the past day. However, the asset remains strong overall, up 20% in the last 7 days. Over the past two weeks, it has seen an increase of almost 30%, trading above $34,000 at the time of writing.
Featured image from Unsplash, chart from TradingView
