- JMP Securities estimates that spot bitcoin ETFs could see $220B in inflows over next 3 years if approved by SEC. Several firms have ETF proposals pending.
- Coinbase is seen as major beneficiary of potential ETF inflows due to position as largest US crypto exchange and asset management plans.
- Massive ETF inflows could ignite “FOMO” among investors, especially if coupled with a bitcoin bull run. JMP cites reduced barriers to entry as additional driver of potential inflows.
Crypto exchange Coinbase looks well-positioned to benefit from growing inflows into spot bitcoin ETFs over the next few years, according to a new report from JMP Securities.
Spot Bitcoin ETF Landscape
The SEC has yet to approve a spot bitcoin ETF in the U.S., rejecting several applications thus far.
However, firms continue to reapply and tweak their filings in hopes of getting a spot bitcoin ETF approved. Several firms currently have proposals under consideration by the SEC.
JMP Securities Analysis
In a new report, analysts at JMP Securities analyzed the potential market impact of spot bitcoin ETFs being approved in the U.S. They estimate that total inflows into spot bitcoin ETFs could reach $220 billion over the next three years if approved.
The analysts see Coinbase as a major beneficiary of these potential inflows, given its position as the largest U.S. crypto exchange and its plans to offer asset management services.
“We believe COIN’s proven track record of regulatory compliance makes it a natural partner for any sponsor looking to launch a spot Bitcoin ETF in the United States,” the analysts wrote.
Potential for Massive Inflows
$220 billion of inflows would represent over 11% of Coinbase’s current market capitalization, presenting a huge potential growth opportunity.
The analysts cite several factors that could drive massive inflows, including increased legitimacy and reduced barriers to entry. A spot bitcoin ETF would provide simplified access for both retail and institutional investors.
Additionally, JMP Securities sees a spot bitcoin ETF approval potentially sparking “FOMO” among investors and igniting a flood of inflows. This could be amplified by a bull run in the price of bitcoin.
Conclusion
While the SEC has been reluctant thus far, the demand for a spot bitcoin ETF continues to build. If approved in the coming years, the launch of spot bitcoin ETFs in the U.S. could drive massive inflows according to JMP Securities. Coinbase stands ready to capitalize as the largest crypto exchange.
