Now that bitcoin-etfs-approved-by-us-sec/” rel=”nofollow”>bitcoin Spot ETFs Approved Per the United States Securities and Exchange Commission (SEC), the crypto space anticipates that more ETFs will enter the market, particularly bitcoin–btc-etf-approved-ethereum–eth-next/” rel=”nofollow”>Spot ethereum ETFs.
Despite this, analysts at JP Morgan, an American multinational financial services company, have revealed a less than optimistic outlook for the possible approval of ethereum spot ETFs.
ethereum Spot ETF Approval Outlook
In a note to clients published on Thursday, January 18, JP Morgan analysts, led by Nikolaos Panigirtzoglou, CEO of the financial services firm, expressed reservations about the forecast ethereum-etf-filings-await-sec-green-light/” rel=”nofollow”>approval of ethereum Spot ETFs by the SEC.
The analysts cited regulatory and judicial reasons as the basis for their prediction, stating that the probability of approval of the ethereum Spot ETF is no more than 50%.
“While we sympathize with the arguments above, we are skeptical that the SEC would classify ether as a commodity as early as May,” the JP Morgan analysts said.
Just last week, the ethereum-etf/” rel=”nofollow”>delayed SEC the approval of Fidelity's ethereum Spot ETF. The regulator postponed its decision date to March 5, 2024, saying it needed more time to evaluate. ethereum-spot-etf/” rel=”nofollow”>The loyalty app. Furthermore, the bitcoin–ethereum-etfs-deadline/” rel=”nofollow”>deadline for the SEC's final decision on Spot ethereum ETF applications runs from late January to August 2024.
The most decisive date that would give the crypto space a better perspective on the possible launch of these ETFs is January 25, the application deadline for Grayscale's ethereum Spot ETF.
Early June 2022, grayscale bitcoin-etf-denial/” rel=”nofollow”>took legal action against the SEC for its rejection of its Spot bitcoin ETF. In August 2023, the asset management company bitcoin-etf-imminent/” rel=”nofollow”>emerged victorious in its lawsuit, after the US Court of Appeals in Columbia ruled that the SEC was wrong to reject Grayscale's bitcoin ETF application.
With the recent SEC approval of the Spot bitcoin ETF after months of bitcoin-etf/” rel=”nofollow”>legal and regulatory challengesmany cryptocurrency enthusiasts anticipate a long regulatory process before the possible approval of Spot ethereum ETFs. If the SEC accepts ethereum spot ETFs, it would offer investors an unprecedented opportunity to gain exposure to the cryptocurrency without the need to own it.
<img decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2024/01/JP-Morgan-Reveals-Likelihood-of-Ethereum-Spot-ETFs-Approved" alt="Tradingview.com eth Price Chart (JP Morgan ethereum Spot ETF)” width=”3266″ height=”1530″ loading=”lazy”/>
eth bulls lose control to bears | Source: ETHUSD on Tradingview.com
Why eth Spot ETF Approval is Around 50%
Currently, the regulatory framework surrounding cryptocurrencies in the United States is still shrouded in uncertainty. This includes XRP, which suffered a lawsuit from the SEC after the regulator labeled it a security in 2020. Additionally, there have been many other cryptocurrencies that the SEC has crypto-securities/” rel=”nofollow”>identified as a value.
The potential approval of ethereum spot ETFs generally depends on the SEC's classification of the digital asset, whether it is a commodity or a security. In January 2024, the regulatory agency ethereum Futures ETF Approved'implicitly' accepting ethereum as a commodity.
If the SEC identifies ethereum as a commodity, then potential approval of an ETF application may be in the offing. However, as JP Morgan analysts have stated, it may take considerable time before the SEC makes that decision.
The regulatory agency has continually taken a aggressive approach in its regulation of cryptocurrencies in the US. Following the approval of bitcoin Spot ETFs, the president of the SEC bitcoin-etfs-criticism-and-contradictions/” rel=”nofollow”>Gary Gensler publicly stated that the agency does not yet approve or endorse bitcoin, labeling all cryptocurrencies as investment contracts subject to federal securities laws.
Featured image from Forbes, chart from Tradingview.com
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