HomeNewsEther ETF Approval Under 50% Probability by May, Says JPMorgan Outlook

Ether ETF Approval Under 50% Probability by May, Says JPMorgan Outlook

- Advertisement -
  • JPMorgan analysts estimate no more than a 50% chance of a spot Ether ETF being approved by May due to regulatory challenges and ongoing lawsuits.
  • Ethereum’s transition to a proof-of-stake model and lawsuits against crypto exchanges offering staking services complicate the ETF approval process.

Ether ETF: A Balanced Probability

Amid the growing anticipation in the crypto market, JPMorgan has expressed cautious skepticism regarding the approval of a spot Ether (ETH) exchange-traded fund (ETF) by May 2023. The investment bank’s assessment suggests that the probability of the U.S. Securities and Exchange Commission (SEC) granting approval by the Ark 21Shares application deadline is unlikely to exceed 50%.

Regulatory Hurdles in Focus

The optimism for Ether‘s ETF approval partly stems from the SEC’s silence on ETH in its lawsuit against crypto exchanges. This silence led some market observers to speculate that the regulator might classify Ether as a commodity, a critical step toward ETF approval. Furthermore, the approval of Ether futures-based ETFs last year added to this positive sentiment, suggesting a perceived regulatory acceptance of Ether as a commodity.

However, JPMorgan’s analysis, led by Nikolaos Panigirtzoglou, offers a more guarded perspective. Their report highlights two key challenges:

  1. Ethereum’s Proof-of-Stake Transition: Ethereum‘s shift from proof-of-work to proof-of-stake in 2022 has brought its decentralization into question, aligning it more closely with other altcoins. This alignment has raised concerns about Ether potentially being classified as a security, given the SEC’s history of categorizing similar altcoins.
  2. Legal Complexities Surrounding Staking Services: The SEC’s ongoing lawsuits against cryptocurrency exchanges that provide staking services for proof-of-stake blockchains, including Ethereum, add another layer of complexity. These legal challenges must be resolved before a spot Ether ETF can be considered for approval.

Market Implications and the Road Ahead

Ether’s recent surge following the approval of a spot bitcoin ETF has been driven by traders betting on the likelihood of an Ether ETF. An approval would mark a milestone, enabling professional investors in the U.S. to gain exposure to Ethereum’s token without direct ownership.

However, the current legal landscape suggests that the path to approval is fraught with uncertainties. The ongoing lawsuits and questions about Ethereum‘s classification post-transition are critical factors that the SEC will likely consider in its decision-making process.

In summary, while the crypto community remains hopeful, JPMorgan’s analysis indicates that the road to a spot Ether ETF approval is complex and uncertain, with significant regulatory hurdles yet to be overcome.

Disclaimer: ETHNews does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. ETHNews is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
AnnJoy Makena
AnnJoy Makenahttps://www.ethnews.com
Annjoy Makena is an accomplished and passionate writer who specializes in the fascinating world of cryptocurrencies. With a profound understanding of blockchain technology and its implications, she is dedicated to demystifying complex concepts and delivering valuable insights to her readers. Business Email: info@ethnews.com Phone: +49 160 92211628