Withdrawing back the approval of Spot Bitcoin ETFs by SEC, there is increased focus on the possibility of Spot Ethereum ETFs getting approved. Yet, JP Morgan analysts cautioned that approval for Ethereum Spot ETFs may not be promising due to regulatory and judicial concerns, with an estimated chance of approval not exceeding 50%.
The analysts expressed uncertainty that the SEC will classify Ethereum as a commodity by May. In addition, the SEC has extended the deadline for evaluating Fidelity’s Ethereum Spot ETF application to March 5, 2024, with the final decision on Spot Ethereum ETF applications expected between late January and August 2024. Although the approval of Ethereum futures ETFs in January 2024 gives some hope, the classification of Ethereum by the SEC will play a significant role in determining the fate of Spot Ethereum ETFs.
The pending deadline for Grayscale’s Ethereum Spot ETF application on January 25 may contribute to more clarity on the potential introduction of these ETFs. Previous challenges by Grayscale to the SEC’s rejections of its Bitcoin ETF may influence the SEC’s decision on Ethereum Spot ETFs.
Despite the SEC’s recent approval of Spot Bitcoin ETFs, Chairman Gary Gensler’s statement cautioning that the agency neither endorses nor approves Bitcoin introduces an element of hesitancy. The cryptocurrency community is eagerly waiting for regulatory clarity while balancing scrutiny and hopes for more accessible investment options.
Hot Take
The uncertain future of Ethereum Spot ETF approval by the SEC has brought more cautious optimism for cryptocurrency investors. The possibility of a successful application by Grayscale and the upcoming deadlines for review provide hope, but regulatory and judicial concerns must be navigated first.
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