JP Morgan believes that the approval of ether-based spot funds this spring is unlikely
Analysts at the investment bank TD Cowen believe that the SEC should not expect approval of an ETF based on the spot price of the second most popular cryptocurrency in the near future.
“Our expectation is that the agency will not be approving ETPs for other crypto tokens any time soon as we believe the SEC will want to gain experience from Bitcoin BTC -1.16% ETPs before it approves an Ethereum or other crypto token ETP, “ experts said.
They suggested that this could happen after the US presidential elections, which are scheduled to take place in early November of this year.
The US Securities and Exchange Commission is currently considering several applications to launch ETH-ETF. However, JP Morgan believes that the approval of spot funds based on ether this coming spring is unlikely.
As the head of the investment bank’s team of analysts, Nikolaos Panigirtzoglou, noted, the period for making a decision on the first of the applications for Ethereum-ETF ends in May. The probability of approval of the application, the analyst believes, is no more than 50%.
“In our opinion, for the SEC to approve spot Ethereum ETFs in May, it would need to classify Ethereum as a commodity (similar to bitcoin) rather than a security. This is far from given, and I wouldn’t put more than a 50% chance to the SEC classifying Ethereum as a commodity before May,” Panigirtzoglou noted.
He also stated that once the Bitcoin ETF is approved, market participants expect Ethereum to also receive its ETF. But, according to the analyst, it is too early to talk about the emergence of such products — the SEC has repeatedly said that they consider all cryptocoins, with the exception of BTC, to be securities.
BlackRock CEO Larry Fink recently said he “sees value” in an Ethereum-based spot ETF.
“It’s no different than what gold represented over thousands of years. It is an asset class that protects you,” Fink explained and recalled the limited issue of BTC.
According to the entrepreneur, these are “only steps towards tokenization.”
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