Bitcoin ETFs Attract Capital from Existing Crypto Products

JP Morgan anticipates up to $36 billion could migrate from existing crypto products to newly approved Bitcoin ETFs, even without new capital entering the crypto market.

• Bitcoin's price fell to $41,500 before recovering, following the launch of the first spot ETFs in the U.S., with analysts suggesting the psychological level of $40,000 as a support for Bitcoin prices in the near term.
• JP Morgan anticipates a significant rotation of capital from existing crypto products into the newly created Bitcoin ETFs, potentially attracting up to $36 billion even if no new capital enters the crypto market.
• Around $3 billion could exit the Grayscale Bitcoin Trust (GBTC) and migrate to the new spot ETFs as investors take profits after buying discounted GBTC shares on the secondary market last year.
• Up to $20 billion from retail investors could migrate from digital wallets held on crypto exchanges to the new ETFs.
• Grayscale's high fees could trigger capital outflows, with possibly an additional $5 to $10 billion leaving GBTC to migrate to cheaper spot Bitcoin ETFs unless Grayscale reduces its fees to match those set by Blackrock and other providers.

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