As the crypto community eagerly awaits the Securities and Exchange Commission’s (SEC) decision on the approval of a spot Ethereum exchange-traded fund (ETF), JP Morgan analysts are casting a shadow of doubt over the prospects for a thumbs-up next month. In a recent note, they outlined their concerns, pointing to the SEC’s recent crackdown on Ethereum-linked entities as a harbinger of potential disapproval.
The SEC’s discreet scrutiny into firms associated with the Ethereum Foundation, the backbone of the Ethereum ecosystem, has set the stage for speculation. While the regulatory body remains tight-lipped about any ongoing investigations, JP Morgan’s analysts interpret these actions as ominous signs, pegging the likelihood of a spot Ethereum ETF approval by May at no more than a coin toss—50%.
Should the Ethereum ETF fail to secure approval within the looming deadline, JP Morgan’s report foresees a possible backlash from the applicants against the regulator. Drawing parallels to past legal skirmishes involving entities like Grayscale and Ripple, the analysts suggest a scenario where the SEC might eventually relent, paving the way for Ethereum ETFs. However, such a resolution is unlikely to materialize as soon as May.
Adding a glimmer of hope to the discourse, JP Morgan analysts had previously floated the idea that Ethereum could be deemed a commodity rather than a security, given its burgeoning decentralization. Yet, they find themselves in alignment with Bloomberg Intelligence ETF analysts, who also expressed skepticism about the likelihood of approval in the imminent future.
As the clock ticks down to the SEC’s decision, the crypto world holds its breath, anticipating the outcome that could significantly influence Ethereum’s trajectory in the financial landscape.
