May 29, 2024
JP Morgan Analysts Cast Doubt on Ethereum Spot ETF Approval
Altcoins News

JP Morgan Analysts Cast Doubt on Ethereum Spot ETF Approval

Following the approval of Spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC), the cryptocurrency market expects an influx of more ETFs, specifically Spot Ethereum ETFs. However, analysts at JP Morgan, a prominent American financial service firm, have presented a rather cautious perspective on the likelihood of Ethereum Spot ETFs receiving approval.

In a communication to clients released on Thursday, January 18, JP Morgan analysts, led by Nikolaos Panigirtzoglou, the Managing Director of the financial service firm, conveyed their reservations regarding the expected approval of Spot Ethereum ETFs by the SEC. Their prediction, grounded in regulatory and legal considerations, suggests that the probability of approval for Ethereum Spot ETFs is no greater than 50%.

While acknowledging the arguments put forth, JP Morgan analysts expressed skepticism about the SEC classifying ether as a commodity as early as May. Recently, the SEC postponed the approval decision for Fidelity’s Ethereum Spot ETF, extending the deadline to March 5, 2024, citing the need for additional time to assess the application. Furthermore, the SEC’s final decision on Spot Ethereum ETF applications is now anticipated between late January and August 2024.

The pivotal date determining the potential launch of these ETFs is January 25, marking the deadline for Grayscale’s Ethereum Spot ETF application. Grayscale had previously taken legal action against the SEC in June 2022 for rejecting its Spot Bitcoin ETF. In August 2023, the asset management company achieved success in its lawsuit when the US Columbia Court of Appeal ruled that the SEC was incorrect in denying Grayscale’s Bitcoin ETF application.

Despite the recent approval of Spot Bitcoin ETFs by the SEC following extensive legal and regulatory challenges, the crypto community foresees a protracted regulatory journey before the potential approval of Spot Ethereum ETFs. If the SEC greenlights Ethereum Spot ETFs, it would present investors with an unprecedented opportunity to gain exposure to the cryptocurrency without direct ownership.

Image by Peter Patel from Pixabay

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