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Ethereum ETFs: JPMorgan Cautiously Optimistic Towards Approval

The approval of ETFs in the US has boosted Bitcoin prices, sparking optimism for Ethereum ETFs. JPMorgan estimates a 50% chance of approval by May, citing potential lawsuits if denied. The SEC’s deadline is May 23. Competition in Ethereum staking, particularly with Lido and EigenLayer, could sway approval odds. However, Bloomberg’s Eric Balchunas is less optimistic, citing a 25% chance and SEC silence.



Ethereum ETFs

The approval of Exchange Traded Funds (ETFs) in the USA has proven to be a price driver for the crypto reserve currency Bitcoin (BTC). Investors are now hoping that these effects will be repeated with Ethereum ETFs (ETH), the number two cryptocurrency.

While the US Securities and Exchange Commission itself has remained silent so far, analysts from the financial world are speaking out. The major US bank JPMorgan estimates the possibility of Ethereum ETFs as early as this May at 50 percent and is therefore one of the optimists.

Read more about Ethereum ETFs and find the most important financial news from around the world with our companion app Born2Invest.

One thing is clear: The deadline for the SEC to approve Ethereum ETFs in line with the market will expire on May 23rd

This is an argument for JPMorgan. Because if the SEC doesn’t give the green light, they have to expect lawsuits, they said. The SEC probably wants to prevent a court ruling from forcing Bitcoin ETFs to give in, as JPMorgan writes in an analysis.

JPMorgan names the Lido service, which successfully offers Ethereum staking as a service, as a sticking point in the decision. There are two special features lurking here: Unlike Bitcoin, interest can be earned with Ethereum through staking and ETFs would like to integrate this option. Lido dominated the market for a long time, but is now facing competition from EigenLayer. This diversification of the Ethereum staking market could prove positive for the approval prospects of ETFs, according to JPMorgan.

The experts at the business news agency Bloomberg assess the situation for Ethereum ETFs much more pessimistically. Eric Balchunas, who was spot on with his predictions for Bitcoin ETFs, reiterates X : 25 percent chance for Ethereum ETFs in May. One of his arguments: The SEC does not discuss details with Ethereum ETF applicants. He sees this silence as a signal of a negative attitude from the SEC.

In contrast to JPMorgan, Balchunas is also skeptical that a court battle would result in a “no” vote. The potential market for Ethereum ETFs is simply too small to justify the financial risks of a legal dispute, he writes.

Conclusion: Ethereum ETFs are hanging by a thread

The SEC has the final say on Ethereum ETFs for now and its boss Gary Gensler is known as a crypto critic. At the same time, however, the SEC wants to avoid taking a hit in court.

In this area of ​​tension, the eagerly awaited decision on Ethereum ETFs will probably be made internally by the SEC in these weeks before May 23rd. Turning this into a betting game doesn’t do justice to the importance of Ethereum as a driver of innovation – but does the SEC see it that way?


(Featured image by viarami via Pixabay)

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First published in BLOCK-BUILDERS.DE. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Sharon Harris is a feminist and a part-time nomad. She reports about businesses primarily involved in tech, CBD, and crypto. She started her career as a product manager at a Silicon Valley startup but now enjoys a new life as a personal finance geek and writer. Her primary aim is to provide readers with a new perspective on the overlapping world of finance and technology.