JP Morgan Says Spot Ethereum ETFs Approval Is Next – With 50% Chances

With the recent approval of Spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC), attention in the crypto space turns to the potential approval of Spot Ethereum ETFs. However, JP Morgan analysts, in a note to clients, have expressed skepticism about the likelihood of approval for Ethereum Spot ETFs.

ETH Facing Regulatory Challenges

JP Morgan analysts, led by Nikolaos Panigirtzoglou, are not so optimistic about the SEC approving Ethereum ETFs. The analysts attributed their cautious stance to regulatory and judicial considerations, estimating the likelihood of approval to be no higher than 50%.

“While we understand the arguments, we doubt the SEC will classify ether as a commodity by May,” said JP Morgan analysts.

Meanwhile, the SEC recently delayed the decision on Fidelity’s Ethereum Spot ETF, extending the deadline to March 5, 2024, for further evaluation. Moreover, the SEC’s final decision on Spot Ethereum ETF applications is now anticipated between late January and August 2024.

Perhaps, the approval of Ethereum futures ETFs in January 2024, completely acknowledging Ethereum as a commodity, brings a glimmer of hope. However, JP Morgan analysts emphasized that the SEC’s classification of Ethereum—whether as a commodity or a security—will play a pivotal role in determining the fate of Spot Ethereum ETFs.

Grayscale’s Impact on SEC Decision

A key date that could provide more clarity on the possible introduction of these ETFs is January 25—the deadline for Grayscale’s Ethereum Spot ETF application

Earlier, grayscale, which successfully challenged the SEC in the past for rejecting its Bitcoin ETF, is now seeking approval for an Ethereum Spot ETF. Meanwhile, the SEC’s response to Grayscale’s previous success will likely influence its decision on 

A Balancing Act

While the SEC’s recent approval of Spot Bitcoin ETFs may signal a positive shift, Chairman Gary Gensler’s public declaration that the agency neither approves nor endorses Bitcoin adds a layer of caution. 

As, the crypto community awaits regulatory clarity while balancing scrutiny and hopes for more accessible investment options.