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Now that Spot Bitcoin ETFs have been approved by the United States Securities and Exchange Commission (SEC), the crypto house anticipates extra ETFs to enter the market, notably Spot Ethereum ETFs. 

Despite this, analysts at JP Morgan, an American multinational monetary service agency, have revealed a lower than optimistic outlook for the potential approval of Ethereum Spot ETFs. 

Ethereum Spot ETF Approval Prospects

In a notice to shoppers issued on Thursday, January 18, JP Morgan analysts led by Nikolaos Panigirtzoglou, the Managing Director on the monetary service agency, expressed their reservations relating to the anticipated approval of Spot Ethereum ETFs by the SEC.

The analysts cited regulatory and judicial causes as the idea for his or her prediction, asserting that the probability of Ethereum Spot ETF approval is not any greater than 50%. 

“While we are sympathetic to the above arguments, we are skeptical that the SEC will classify ether as a commodity as soon as May,” analysts at JP Morgan said. 

Just final week, the SEC delayed the approval of Fidelity’s Ethereum Spot ETF. The regulator postponed its determination date to March 5, 2024, stating it wanted extra time to judge Fidelity’s application. Additionally, the deadline for the SEC’s last determination on the Spot Ethereum ETF purposes extends from late January to August 2024. 

The most decisive date that may give the crypto house a greater outlook on the potential launch of those ETFs is January 25, the deadline for Grayscale’s Ethereum Spot ETF utility. 

Earlier in June 2022, Grayscale took legal action in opposition to the SEC for its rejection of its Spot Bitcoin ETF. In August 2023, the asset administration firm emerged victorious in its lawsuit, after the US Columbia Court of Appeal dominated that the SEC was mistaken to reject Grayscale’s Bitcoin ETF utility. 

With the SEC’s latest approval of Spot Bitcoin ETF after months of legal and regulatory challenges, many crypto fanatics anticipate a prolonged regulatory course of earlier than the potential approval of Spot Ethereum ETFs. If Ethereum Spot ETFs are accepted by the SEC, then it might provide traders an unprecedented alternative to realize publicity to the cryptocurrency with out the necessity to personal it. 

ETH bulls lose management to bears | Source: ETHUSD on Tradingview.com

Why ETH Spot ETF Approval Hovers At 50%

Presently, the regulatory framework surrounding cryptocurrencies within the United States remains to be shrouded in uncertainty. This contains XRP, which suffered a lawsuit from the SEC after the regulator labeled it a safety in 2020. Additionally, there have been many different cryptocurrencies the SEC has identified as a security. 

The potential approval of Ethereum Spot ETFs usually hinges on the SEC’s classification of the digital asset, whether or not it’s a commodity or a safety. In January 2024, the regulatory company approved Ethereum futures ETFs, ‘implicitly’ accepting Ethereum as a commodity. 

If the SEC identifies Ethereum as a commodity, then the potential approval of an ETF utility could also be in sight. However, as JP Morgan analysts have said, it might take a substantial period of time earlier than the SEC makes that call.

The regulatory company has frequently taken an aggressive approach in its regulation of cryptocurrencies within the US. Following the approval of Spot Bitcoin ETFs, SEC Chairman Gary Gensler publicly declared that the company nonetheless doesn’t approve or endorse Bitcoin, labeling all cryptocurrencies as funding contracts topic to federal securities legal guidelines.

Featured picture from Forbes, chart from Tradingview.com

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