JP Morgan: Ethereum ETF Approval Could Become a Reality

In the world of cryptocurrencies and financial markets, there is always one source of speculation and hope: the approval of exchange traded funds (ETFs) focused on cryptocurrencies.

A particular focus is currently on Ethereum, the second largest cryptocurrency by market capitalization. According to JPMorgan, there is now new reason to hope that such an Ethereum ETF could be approved in the future.

Read more about the possible approval of Ethereum ETF and find the most important business news of the day with our companion app Born2Invest.

A question of time for the first Ethereum ETF to be approved

Nikolaos Panigirtzoglou, managing director and global market strategist at JPMorgan, said that despite the uncertainties and the SEC’s current investigation into the Ethereum Foundation, it is possible that a spot Ethereum ETF will ultimately be approved.

“If there is no approval for a spot Ethereum ETF in May, we expect litigation to follow thereafter,” said Panigirtzoglou. He added that the most likely outcome of this litigation would be an SEC defeat, similar to the Grayscale and Ripple cases last year. This would ultimately lead to the approval of spot Ethereum ETFs, although not as soon as this May.

Interestingly, Panigirtzoglou still maintains the chances of approval in May at 50% despite reports suggesting an SEC investigation into the Ethereum Foundation and an attempt to legally classify Ether (ETH) as a security.

Easing Centralization Concerns

A glimmer of hope for Ethereum and its supporters could be the network’s decreasing centralization.

For example, Lido’s declining market share was seen as a positive step towards greater decentralization. Panigirtzoglou and his team emphasize that the decentralization of the network plays an important role in classifying a digital token as a security. This was also highlighted by the SEC’s release of the “Hinman documents” last June.

Damaged hopes for a May approval

Despite these positive developments, several analysts have tempered their expectations regarding a potential SEC approval of a spot Ethereum ETF in May. Eric Balchunas, senior ETF analyst at Bloomberg, for example, said his expectations for approval in May are a pessimistic 25%, down sharply from 70% in January.

The SEC is currently reviewing comments on several spot Ethereum ETF applications, including those from Fidelity, Grayscale and Bitwise. Comment periods for all three applications close later this month.

Summary

The discussions and speculation surrounding the approval of a Spot Ethereum ETF continues to be a hot topic in the crypto and financial world. While the immediate future remains uncertain, the possibility of approval, even if it could be delayed by legal battles, still appears to be on the table, according to experts such as JPMorgan’s Nikolaos Panigirtzoglou.

This development is not only significant for Ethereum investors and supporters, but could also have far-reaching implications for the entire crypto market and the way digital currencies are treated by regulatory authorities.

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(Featured image by WorldSpectrum via Pixabay)

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