JPMorgan maintains a positive outlook on the eventual approval of spot Ethereum exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC), despite earlier assigning a probability of no more than 50% for approval by the initial May deadline.
Nikolaos Panigirtzoglou, Managing Director and Global Market Strategist at JPMorgan, expressed this sentiment to The Block, highlighting the possibility of a litigation process if there is no approval in May. Panigirtzoglou believes that, similar to previous legal battles involving Grayscale and Ripple, the SEC is likely to lose such litigation, paving the way for eventual approval of spot Ethereum ETFs, albeit not necessarily by May.
Interestingly, Panigirtzoglou has maintained the 50% odds for May approval despite recent reports indicating the SEC’s investigation into the Ethereum Foundation and efforts to potentially classify ether (ETH) as a security.
In a recent report, Panigirtzoglou and his team noted that Ethereum’s reduced centralization concerns, such as the decline in market share of platforms like Lido, increase the likelihood of ETH avoiding classification as a security in the future. They emphasized the role of network decentralization in determining the classification of digital tokens, citing the SEC’s “Hinman documents” released last June.
However, hopes for May approval have dimmed among several analysts. Bloomberg senior ETF analyst Eric Balchunas, for example, has revised his optimism from 70% in January to a more pessimistic 25% for May approval.
Currently, the SEC is seeking public comments on several spot ETH ETF applications from entities like Fidelity, Grayscale, and Bitwise. Comments for all three are expected later this month.
