Hedge Fund Pushes Back on JPMorgan’s Claim That ETF Would Hurt Bitcoin

A UK-based hedge fund has refuted claims made by JPMorgan Chase that a bitcoin exchange-traded fund (ETF)would hurt the price in the short-term. 

In a client note distributed in January, JPMorgan strategists said the approval of a Bitcoin ETF would negatively impact BTC’s price in the near-term.

The Wall Street analysts argued an institutional-grade ETF would introduce competition to Grayscale’s flagship Bitcoin Trust (GBTC) product, which holds more than $24 billion in assets under management. 

The note explained an ETF would lead to an outflow from the fund while cutting into the Trust’s premiums. 

Crypto hedge fund Tyr Capital Arbitrage SP conducted a refutation to JPMorgan’s claims, telling Cointelegraph that they “disagree” with the evaluation. According to Tyr, there is no evidence suggesting a decrease in GBTC premiums would lead to negative short-term returns for Bitcoin.

The fund manager said of the yet-to-be-released report: 

 “Instead we found evidence of the opposite, namely a decrease in the GBTC Premium tends to be followed by short term gains in Bitcoin.

Their report goes on to say: 

We found no evidence that supply originating from the ‘new’ shareholders affects the premium in any meaningful way. […] We found, instead, evidence that supply originating from existing or ‘old’ shareholders is negatively affecting the premium (effectively ‘front running’ or discounting the effect the ‘new’ shareholders will eventually have).

Tyr Capital’s research lead Nick Metzidakis told Cointelegraph a decrease in premiums had historically resulted in a positive impact on Bitcoin’s price.


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