In a recent report, banking giant JP Morgan predicted that there is only a 50% chance that an Ethereum spot exchange-traded fund (ETF) will be approved in May.
What Happened: an investigative report cited by CoinDesk says that the SEC's ongoing investigation into companies involved in the #binance ETH/USD fund could affect the spot ETF's approval in May.
JP Morgan continues to argue that these ETFs are unlikely to be approved in May, as was its initial position in January; the SEC is expected to make a final decision on several #ETF applications by May 23.
If the spot etherium ETFs are not approved by the end of May, we expect litigation with the SEC to begin after May," said a group of JPM analysts led by Nikolaos Panigirzoglou. Drawing parallels to the Grayscale and Ripple cases, the bank expects the SEC to eventually lose its case; it expects the SEC to eventually approve the SpotEther ETF, but not until May.
The report also emphasizes that Aether's low concentration in stakes could make it more likely that Aether will avoid being listed as a security.
Why it matters: the approval of a spot ETF could be a major milestone for the #cryptocurrency market. However, a major obstacle is the SEC's ongoing investigation into companies associated with the Ethereum Foundation. The results of this investigation could set a precedent for future cryptocurrency ETF approvals.
In addition, according to JPMorgan, the possibility of litigation with the SEC could lead to significant changes in the regulatory environment for cryptocurrencies. As with the Grayscale and Ripple cases, the bank's prediction that the SEC will lose such a lawsuit could further impact the future of cryptocurrency ETFs.
What's next: the impact of Ethereum as an institutional asset class will be explored in more detail at Benzinga's "The Future of Digital Assets" event on Nov. 19.
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