JPMorgan is confident about the U.S. Securities and Exchange Commission's (SEC) final green light for its Spot Ethereum exchange-traded fund (ETF).
Despite earlier this year pegging the chance of approval by May as less than 50%, optimism persists within the company.
Increased probability of Ethereum ETF approval
Nikolaos Panigirtzoglou, managing director and global market strategist at JPMorgan, said a delay beyond May could trigger a legal process similar to the previous legal battle over Grayscale. He said there is. He expects the SEC may lose these cases.
This could pave the way for the final approval of the Ethereum ETF, albeit on a later schedule.
“If there is no spot approval for the Ethereum ETF in May, it is assumed that legal proceedings will take place after May,” Panigirtzoglou said.
This optimistic outlook continues amid reports that the SEC is scrutinizing the Ethereum Foundation and efforts to classify Ethereum as a security. However, easing concerns over centralization, and in particular Lido Finance's declining market share, have increased the likelihood that ETH will avoid security designation.
The JPMorgan team cites the SEC's Hinman document and emphasizes that network decentralization is a key element.
“Lido’s share of staked ETH has further declined from about a third a year ago to about a quarter now. This alleviates concerns about concentration on the Ethereum network. , which increases the likelihood that Ethereum will avoid security designation in the future,” Panigirtzoglou said.
In contrast, this sentiment is not widely accepted. Eric Balchunas, senior ETF analyst at Bloomberg, said optimism is waning. He adjusted the probability of Ethereum ETF approval to 25% from the original 70% in January.
Read more: Ethereum ETF explained: What is Ethereum ETF and how does it work?
The SEC continues to seek comments from leading companies such as Fidelity, Grayscale, and Bitwise on several spot Ethereum ETF applications, adding to this saga. These developments are being closely monitored as they could have a significant impact on the regulatory landscape of cryptocurrencies in the United States.
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