Chance of Ethereum ETF approval by May is less than 50%: JP Morgan | CoinDesk JAPAN

There is growing optimism in the market that Ark 21Shares’ spot Ethereum (ETH) exchange traded fund (ETF) will be approved by May 23rd. However, according to JPMorgan, there is less than a 50% chance that the U.S. Securities and Exchange Commission will approve the ETF by that date.

Ever since Bitcoin (BTC) ETF buzz hit the market last year, traders have been eyeing Ethereum as the next candidate for ETF approval in the US. Reflecting this sentiment, Grayscale’s discount to Ethereum Trust’s (ETHE) net asset value (NAV) has narrowed since the summer, hovering around 12% for the past two months, according to JPMorgan. are doing.

According to the bank, the reason the SEC did not mention ETH in its lawsuit suing crypto exchanges for violating securities laws is because the SEC may classify the crypto asset as a commodity in the coming months. Some argue that means higher, which is a necessary condition for spot ETF approval. There is also an argument that the approval of an Ethereum futures-based ETF last September “in itself means that Ethereum is considered a commodity.”

But JPMorgan analysts led by Nikolaos Panigirtzoglou are skeptical. “While we sympathize with those arguments, we are skeptical that the SEC will classify Ethereum as a commodity as early as May,” they said in a note to customers on January 18. He added that the chance of a spot ETF being approved is “less than 50%.”

After the Bitcoin ETF was approved, ETH has soared in recent weeks as traders are betting on the possibility of the Ethereum ETF being approved. If approved, it would be the first time that professional investors in the U.S. can gain exposure to this blockchain without owning its tokens.

Due to Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism in 2022, which negatively affected blockchain decentralization, Ethereum was declared unvalued by the SEC. The report states that it is similar to altcoins other than Bitcoin (BTC), which is classified as a security.

“Due to ongoing SEC lawsuits against crypto exchanges that provide staking services for PoS blockchains, including Ethereum, the approval of spot Ethereum ETFs is unlikely, at least until these lawsuits are resolved. “This will be difficult,” the report added.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Shutterstock
｜Original text: No More Than 50% Chance of Spot Ether ETF Approval By May, JPMorgan Says