Strategists at JPMorgan Hunt caused quite the stir in January when they informed clients that the approval of a Bitcoin (BTC) exchange-traded fund, or ETF, would be a curt-term headwind for the digital asset. A United Kingdom-based cryptocurrency hedge fund director is attempting to cascade cold water on those claims, asserting that JPMorgan's assay isn't based on quantitative analysis or in-depth research.

The crux of JPMorgan's statement is that a new institutional-grade ETF would introduce competition for Grayscale Bitcoin Trust, or GBTC, which has amassed over $22 billion in assets under direction. The banking concern's strategists say that the new ETF could lead to a cascade of GBTC outflows and cut into the premium.

GBTC boasts a large premium over Bitcoin largely because of its dominant position in the market. Institutional investors that want exposure to the digital asset without having to purchase information technology outright have few options outside of GBTC.

Tyr Capital Arbitrage SP has completed a detailed refutation to JPMorgan's claims. The fund manager told Cointelegraph: "We disagree with the JPM assessment" on grounds that there is no evidence suggesting that a decrease in the GBTC premium will lead to negative curt-term returns for BTC.

"Instead we found evidence of the opposite, namely a decrease in the GBTC Premium tends to exist followed past short term gains in Bitcoin," Tyr says in its even sohoped-for-released report.

The written report continues:

"We constitute no evidence that supply originating from the 'new' shareholders affects the premium in any meaningful way. [...] We found, instead, bear witness that supply originating from existing or 'quondam' shareholders is negatively affecting the premium (finer 'front running' or discounting the effect the 'new' shareholders volition eventually have)."

Nick Metzidakis, Tyr Capital's inquiry pb, told Cointelegraph that his assay of GBTC's premium history over the past five years suggests that a "decrease in the premium has a positive touch on on Bitcoin."

As for Grayscale Bitcoin Trust, Metzidakis said that increased competition may impact its market place share but that its assets under management volition likely continue to rise as more investors allocate to Bitcoin.

Despite rumblings to the contrary, Metzidakis doesn't believe the The states Securities and Exchange Commission will greenlight a Bitcoin ETF this yr. That beingness said, the growth of crypto as an asset course "may encourage regulators to fast rails their credence of a Bitcoin ETF equally they are motivated to provide a prophylactic and controlled signal of access" to the new asset class.

He continued:

"Institutional adoption of Bitcoin can only be positive for the price of Bitcoin in the long run yet information technology may increase its correlation to other asset classes. That would particularly be the case in times of crisis."