Ethereum ETF Has Only a 50% Chance of Approval

The banking giant has recently tempered its expectations for the SEC's review of proposed funds linked to ETH prices.


According to analysis from experts at JP Morgan, the chances of the Securities and Exchange Commission (SEC) approving a spot Ethereum exchange-traded fund (ETF) proposal next month are not high. Analysts say, based on the SEC’s recent actions against Ethereum-related entities, that approval is unlikely.

SEC’s cautious attitude

In a note published on Thursday, the bank pointed out that the SEC’s cautious attitude, coupled with news of an investigation into companies linked to the Ethereum Foundation, points to the possibility of passing the ETF proposal. Ethereum on-site in May was just under 50%. Previously, there was news that the Ethereum Foundation – a non-profit organization that supports the platform – was being investigated by authorities, although the SEC has not confirmed this information.

JP Morgan’s report also mentioned legal possibilities if the SEC’s decision is unfavorable. They argue that failure to approve could lead to legal action on the part of the applicant and predict that the SEC will likely not be successful in this case, similar to previous cases involving Grayscale and Ripple. They believe that, eventually, the SEC will have to approve spot Ethereum ETFs, although this will not happen in May.

In a more positive assessment last month, analysts at JP Morgan expressed the view that Ethereum may not be considered a security thanks to the project’s increasing decentralization, but could be decentralized class as a commodity. However, recently they expressed doubts about the possibility that the SEC will classify Ethereum as a commodity in the coming weeks.

Investors will be disappointed

Not only JP Morgan, analysts at Bloomberg Intelligence are also not optimistic about these ETF products being licensed next month. James Butterfill, head of research at CoinShares, also said that investors may face disappointment as the approval deadline approaches.

Related: Ethereum Aiming for $4000 with Surging Whale Activity

On the other hand, several major investment firms such as BlackRock, Fidelity, and Grayscale are working to issue Ethereum ETFs. These products, if approved, would expand investor access to the second largest digital asset in the market without having to purchase and store them themselves.

On January 10, the SEC approved 10 Bitcoin (BTC) ETFs, and they began trading the next day, achieving spectacular success ever since.


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