JPMorgan analysts suggest that the Securities and Exchange Commission (SEC) may have to approve Grayscale Investments’ proposal for a Bitcoin exchange-traded fund (ETF) in order to maintain regulatory consistency. The SEC had previously rejected Grayscale’s efforts due to concerns about market manipulation and investor protection. The analysts argue that approving futures-based Bitcoin ETFs while denying spot-based ETFs creates a regulatory challenge and that retroactively withdrawing previous approvals would be disruptive for both the market and the SEC. Spot-based ETFs, which allow investors to hold positions indefinitely, are seen as potentially opening the floodgates to mainstream investment. However, the report also notes a decline in investor interest in Bitcoin funds amid regulatory scrutiny and market volatility.
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