“If there is no Ethereum ETF approval in May, we assume there will be litigation after May,” Nikolaos Panigirtzoglou, managing director and global markets strategist at JPMorgan, told The Block. “I think the most likely scenario is that the SEC ends up losing this lawsuit (similar to what happened with Grayscale and Ripple’s legal battle last year), which means the SEC will eventually approve a spot Ethereum ETF. This is probably ).”
Notably, Panigirtzoglou maintained the probability of approval in May at 50%, despite recent reports that the SEC is investigating the Ethereum Foundation and is actively seeking to classify Ether (ETH) as a security through legal means.
Earlier this week, Panigirtzoglou and his team said in a report that Ethereum’s easing of centralization issues (e.g. Lido’s declining market share) makes it more likely that ETH will not be designated as a security in the future. The team pointed out that network decentralization plays an important role in determining the security classification of digital tokens, as highlighted in the ‘Hinman Document’ released by the SEC last June.
Hopes for May approval waning
Several analysts have reduced optimism about the chances of the SEC approving a spot ether ETF by May. For example, last week Eric Balchunas, senior ETF analyst at Bloomberg, said the odds of approval in May remain pessimistic, at 25%, up from 70% in January.
The SEC is currently soliciting comments on a handful of spot ETH ETF applications, including Fidelity, Grayscale, and Bitwise. Comments on all three are due later this month.
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