Analysts from JPMorgan (NYSE:JPM) and Bloomberg Intelligence anticipate Wall Street's approval of a Bitcoin Exchange-Traded Fund (ETF) before January 10, 2024, despite the U.S. Securities and Exchange Commission's (SEC) ongoing concerns about market manipulation.
On Friday, it was reported that these ETFs, which allow investors to gain exposure to cryptocurrencies by mirroring their value, have seen increased interest despite the SEC's reservations. The ProShares Bitcoin Strategy ETF, for instance, has not shown significant growth despite an initial $1 billion investment.
According to InvestingPro Data, the ProShares Bitcoin Strategy ETF, also known as BITO, has a market cap of 914.16M USD. The ETF has seen a significant return over the last week, with a 7.86% increase, as per InvestingPro Tips. The dividend yield for BITO is projected to be 6.04% for the year 2023. The ETF's performance has been mixed over the past few months, with a 1-month total return of 6.79%, a 3-month total return of -4.59%, and a 6-month total return of -0.46%.
The absence of a spot variant in the U.S. remains notable, even as the SEC has approved Bitcoin futures ETFs. Experts continue to argue for a spot Bitcoin ETF (TSX:EBIT) due to investor interest. Recent applications from major firms like BlackRock (NYSE:BLK) and Grayscale have sparked optimism in the market, despite previous rejections from the SEC.
On Thursday, Gary Gensler, the chair of the SEC, discussed multiple Bitcoin ETF proposals currently under review by various divisions within the SEC during an interview with Bloomberg. He emphasized that around ten spot Bitcoin ETF applications are undergoing rigorous examination, following a time-tested process consistently employed by the SEC for decades.
Gensler also highlighted Grayscale's attempt to transition its GBTC fund into a spot Bitcoin ETF following a court victory in August. This action was not contested by the SEC; Gensler clarified that this does not guarantee Grayscale's approval or influence other similar proposals' outcomes.
The market's sensitivity to these developments was underscored by turbulence following a false report on BlackRock's Bitcoin ETF endorsement. Through his revelations, Gensler reiterated the SEC's commitment to its foundational procedures and ensuring an unbiased evaluation of each application.
InvestingPro Tips suggests that while BITO has seen a significant return over the past week, it suffers from weak gross profit margins and its valuation implies a poor free cash flow yield. For more insights like these, investors can check out the InvestingPro product which includes additional tips.
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