America’s largest bank is apparently skeptical about recent cryptocurrency market enthusiasm.

As Coindesk reported Monday (Nov. 13), a recent research report by JPMorgan Chase calls into question the excitement about the possible approval of spot bitcoin exchange-traded-funds (ETFs) that has led to a bull market for crypto.

This sentiment has been driven by the belief that a greenlit spot bitcoin ETF would attract new investors, and that the approval would represent a victory for the crypto sector in its ongoing conflict with Securities and Exchange Commission (SEC), thus softening the commission’s attitude towards digital currencies. 

This belief was on display last week in an interview Ripple CEO Brad Garlinghouse gave to CNBC, in which he said his company’s recent court victories over the SEC are a sign that the commission “has been put in check” in the U.S.

“And I’m hopeful this will be a thawing of the permafrost in the United States for really seeing an amazing industry that has immense potential to thrive in the largest economy in the world,” Garlinghouse told the network.

But JPMorgan analysts wrote that they are dubious about both arguments, predicting that it’s more likely that existing funds will move from current bitcoin products into ETFs rather than new capital being invested in crypto. The bank said that ETFs have gotten little investor notice since being introduced in Canada and Europe.

And while the SEC has suffered some recent defeats, “it is far from clear that the regulatory tightening of the crypto industry will lessen significantly going forward given how unregulated this industry is,” the report said.

“U.S. crypto industry regulations are still pending and we do not believe U.S. lawmakers would shift their stance…especially with the memories from the FTX fraud still fresh,” the bank added.

Last month saw bitcoin reach $35,000 for the first time in a year due to the possible approval of the first U.S. spot bitcoin ETFs.

That rally came after a federal appeals court provided a win for Grayscale Investments in its efforts to create a spot bitcoin ETF despite objections from the SEC.

As reported here last year, SEC Chairman Gary Gensler has voiced strong opposition to a spot ETF, writing in a letter to pro-crypto Rep. Tom Emmer, R-Minn, that the “markets for actual Bitcoin itself today are largely unregulated.” 

“This lack of regulatory oversight and surveillance leads to concerns about the potential for fraud and manipulation,” Gensler added.