Analysts Doubt Approval of Ethereum Spot ETFs
Analysts at JP Morgan have expressed skepticism about the approval of Spot Ethereum ETFs by the United States Securities and Exchange Commission (SEC). In a note to clients, the analysts cited regulatory and judicial reasons for their prediction, stating that the likelihood of approval is no higher than 50%. The SEC recently delayed the approval of Fidelity’s Ethereum Spot ETF and extended the deadline for the final decision on Spot Ethereum ETF applications. The most decisive date for potential launch is January 25, which is the deadline for Grayscale’s Ethereum Spot ETF application. However, it may take a considerable amount of time before the SEC classifies Ethereum as a commodity.
Long Regulatory Process Anticipated
With the recent approval of Spot Bitcoin ETFs, many crypto enthusiasts expect a lengthy regulatory process before the potential approval of Spot Ethereum ETFs. If approved, it would provide investors with exposure to Ethereum without owning it. However, JP Morgan analysts believe that it may take time for the SEC to classify Ethereum as a commodity, which would increase the chances of ETF approval. The SEC has taken an aggressive approach in regulating cryptocurrencies in the US and does not endorse Bitcoin or any other cryptocurrencies.
Hot Take: Uncertain Future for Ethereum Spot ETFs
The approval of Spot Bitcoin ETFs by the SEC has raised hopes for more ETFs in the crypto market. However, JP Morgan analysts cast doubt on the prospects of Ethereum Spot ETFs. They believe that regulatory and judicial factors make it unlikely for these ETFs to be approved. The recent delay in Fidelity’s application and extension of deadlines for SEC decisions further indicate a slow process. While Grayscale’s application deadline could provide more clarity, it may still take a significant amount of time before Ethereum is classified as a commodity by the SEC. This uncertainty presents challenges for those anticipating the launch of Ethereum Spot ETFs.
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