JP Morgan predicts a 50% chance of Ethereum ETFs being approved soon.

Spot Ethereum ETFs Face Regulatory Hurdles, According to JP Morgan Analysts

Following the approval of Spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC), the focus in the crypto industry has turned to the potential approval of Spot Ethereum ETFs. However, JP Morgan analysts have expressed doubts about the likelihood of such approval.

JP Morgan analysts, led by Nikolaos Panigirtzoglou, have taken a cautious stance on the SEC approving Ethereum ETFs. They pointed to regulatory and judicial factors as the basis for their skepticism, estimating that the chances of approval are no higher than 50%.

“While we understand the arguments, we doubt the SEC will classify ether as a commodity by May,” said JP Morgan analysts.

Meanwhile, the SEC has recently postponed its decision on Fidelity’s Ethereum Spot ETF, extending the deadline to March 5, 2024, for further evaluation. The final decision on Spot Ethereum ETF applications is now expected to be made between late January and August 2024.

There is a glimmer of hope with the approval of Ethereum futures ETFs in January 2024, which fully recognizes Ethereum as a commodity. However, JP Morgan analysts emphasized that the SEC’s classification of Ethereum, whether as a commodity or a security, will play a crucial role in determining the fate of Spot Ethereum ETFs.

A significant date to watch for more clarity on the potential introduction of these ETFs is January 25, which is the deadline for Grayscale’s Ethereum Spot ETF application. Grayscale, having previously challenged the SEC and won for its Bitcoin ETF, is now seeking approval for an Ethereum Spot ETF. The SEC’s response to Grayscale’s previous success is likely to influence its decision on Ethereum ETFs.

While the recent approval of Spot Bitcoin ETFs by the SEC may indicate a positive shift, Chairman Gary Gensler’s statement that the agency neither approves nor endorses Bitcoin adds a layer of caution. The crypto community is eagerly awaiting regulatory clarity while managing expectations and hopes for more accessible investment options.