Ether Spot ETFs Still Have No More Than 50% Chance of Approval in May: JPMorgan

There will probably be litigation against the SEC after May if ether ETFs aren’t approved, the report said.

AccessTimeIconApr 11, 2024 at 2:04 p.m. UTC
Updated Apr 11, 2024 at 2:06 p.m. UTC
  • JPM says the odds of a spot ether ETF approval in May are still no more than 50%.
  • There will likely be litigation against the SEC if the regulator doesn’t approve the products in May, the report said.
  • Spot ether ETFs will eventually be approved, the bank said.

Recent news that the U.S. Securities and Exchange Commission (SEC) is investigating companies associated with the Ethereum Foundation is consistent with the view that there is no more than a 50% chance of spot ether (ETH) exchange-traded fund (ETF) approval in May, JPMorgan (JPM) said in a research report on Thursday.

The bank reiterated its view that approval of these products is unlikely next month, a position first expressed in January. The SEC must make final decisions on some of the ETF applications by May 23. The SEC approved spot bitcoin (BTC) ETFs in January, stirring speculation in some quarters that versions for ether, the token of the Ethereum blockchain, may follow suit.

“If there is no spot ether ETF approval in May, then we assume there is going to be litigation against the SEC after May,” analysts led by Nikolaos Panigirtzoglou wrote.

JPMorgan said the most likely outcome is that the SEC will eventually lose this litigation, similar to what happened in the Grayscale and Ripple cases, and will eventually approve spot ether ETFs. But not in May.

One reason the SEC is likely to lose any litigation is because of the declining concentration in staking on Ethereum, raising the chance that ether will avoid being designated as a security, the report said.

The bank noted in a report last week that Lido’s share of staked ether has continued to fall, which should reduce concerns about concentration in the network.

Read more: Ether Could Avoid Designation as a Security With Centralization Risk Easing, JPMorgan Says

Edited by Sheldon Reback.


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Will Canny is CoinDesk's finance reporter.