JPMorgan: Odds of Ether Spot ETF Approval in May Remain Below 50%

Ethereum ETF

According to a recent report by JPMorgan (NYSE:JPM), the likelihood of approval for spot ether (ETH) exchange-traded funds (ETFs) in May remains uncertain, with no more than a 50% chance of approval. The report suggests that if the Securities and Exchange Commission (SEC) does not approve these products next month, litigation against the regulatory body is probable.

JPMorgan reaffirms its stance, initially expressed in January, that approval for spot ether ETFs is unlikely in the upcoming month. The SEC is expected to make final decisions on certain ETF applications by May 23, following its approval of spot bitcoin (BTC) ETFs earlier this year, sparking speculation about potential approval for ether ETFs.

Analysts at JPMorgan, led by Nikolaos Panigirtzoglou, anticipate potential litigation against the SEC if spot ether ETFs are not approved in May. They suggest that the SEC is likely to face legal challenges, similar to previous cases involving Grayscale and Ripple, and eventually approve spot ether ETFs, albeit not in May.

The report highlights one reason why the SEC might face difficulties in any potential litigation: the decreasing concentration in staking on the Ethereum network, which reduces the likelihood of Ether being classified as a security.

Additionally, JPMorgan points out in a recent report that the share of staked ether held by Lido has continued to decline, alleviating concerns about network concentration.

The investigation by the SEC into companies associated with the Ethereum Foundation aligns with JPMorgan’s cautious outlook, reinforcing the uncertainty surrounding spot ether ETF approval in May.

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