Crypto News- Investors anticipating the green light for a spot Ether (ETH) exchange-traded fund (ETF) by May 23 are facing a sobering reality, according to JPMorgan. The Securities and Exchange Commission (SEC) has set this date as the deadline for the Ark 21Shares application. However, JPMorgan analysts, led by Nikolaos Panigirtzoglou, poured cold water on the optimism, stating that the probability of SEC approval is unlikely to exceed 50%.
Ether ETF Faces Uphill Battle: JPMorgan Gives Approval Odds Below 50% by May
The anticipation surrounding an Ether ETF approval has been fueled by the recent buzz in the market, reminiscent of the fervor surrounding the Bitcoin ETF narrative last year. Traders eyeing Ether as the next potential candidate for a spot ETF in the U.S. have closely monitored developments. JPMorgan points to the Grayscale Ethereum Trust (ETHE), where the discount to net asset value (NAV) has been contracting since the summer, hovering around 12% for the past two months.
Some market participants have found solace in the SEC’s omission of Ether in its lawsuit against crypto exchanges for securities law violations. They argue that this silence indicates a likely classification of Ether as a commodity in the coming months, a prerequisite for spot ETF approval. Alternatively, approval of Ether futures-based ETFs last September is seen by some as implying the cryptocurrency’s commodity status.
JPMorgan Throws Cold Water on Hopes for Spot Ether ETF Approval: Less Than 50% Chance, Analysts Say
JPMorgan’s analysts, however, maintain skepticism. In a note to clients on Jan. 18, they expressed doubt about the SEC swiftly classifying Ether as a commodity by May. They emphasized that the chances of spot Ether ETF approval this year are “not higher than 50%.”
The recent surge in ETH prices, following the approval of a spot Bitcoin ETF, has intensified speculation among traders regarding Ether’s ETF approval. If granted, this would mark the first opportunity for U.S. professional investors to gain exposure to the blockchain’s token without direct ownership.
The report highlights Ethereum’s transition from proof-of-work to proof-of-stake in 2022 and its impact on decentralization. With Ether now resembling other altcoins outside of Bitcoin, classified as securities by the SEC, the regulatory landscape adds complexity to the ETF approval prospects.
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