Spot Ethereum ETFs Hold Only 50% May Approval Probability: JPMorgan

Banking giant JPMorgan in a recent report predicted that the likelihood of spot Ethereum Exchange-Traded Funds (ETFs) receiving approval in May stands at a mere 50%.

What Happened: The research report, quoted by CoinDesk, suggests that the ongoing U.S. Securities and Exchange Commission (SEC) investigation into firms associated with the Ethereum ETH/USD Foundation could potentially affect the approval of Spot Ether ETFs in May.

Consistent with its initial viewpoint from January, JPMorgan continues to assert that the approval of these ETFs in May is unlikely. The SEC is expected to deliver final verdicts on several ETF applications by May 23.

“If there is no spot ether ETF approval in May, then we assume there is going to be litigation against the SEC after May,” stated a team of JPM analysts led by Nikolaos Panigirtzoglou. The bank anticipates that the SEC will eventually lose this litigation, drawing parallels with the Grayscale and Ripple cases. It expects the SEC to ultimately greenlight spot Ether ETFs, albeit not in May.

The report also underscored that the diminishing concentration in Ethereum staking could enhance the chances of Ether evading a security designation.

Also Read: Ether ETF Decision: What Investors Need To Know About The SEC’s Next Move

Why It Matters: The approval of Spot Ether ETFs could mark a significant milestone for the cryptocurrency market. However, the ongoing SEC investigation into companies linked with the Ethereum Foundation poses a considerable hurdle. The outcome of this investigation could set a precedent for future cryptocurrency ETF approvals.

Furthermore, the potential litigation against the SEC, as suggested by JPMorgan, could lead to significant changes in the regulatory landscape for cryptocurrencies. The bank’s prediction of the SEC losing such litigation, as seen in the Grayscale and Ripple cases, could further influence the future of cryptocurrency ETFs.

What's Next: The influence of Ethereum as an institutional asset class is expected to be thoroughly explored at Benzinga's upcoming Future of Digital Assets event on Nov. 19.

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