- The SEC has not yet classified Ethereum as a commodity, making the approval of a spot Ethereum ETF in the near future unlikely.
- JPMorgan strategist Nikolaos Panigirtzoglou believes there is a 50% or less chance of a spot Ethereum ETF approval by May, as the SEC would likely need to classify Ethereum as a commodity first.
- While SEC Chair Gary Gensler has not explicitly stated Ethereum is a security, his past comments indicate the SEC still views cryptocurrencies besides Bitcoin as securities.
The Securities and Exchange Commission (SEC) has not yet classified Ethereum as a commodity. This makes the approval of a spot Ethereum exchange-traded fund (ETF) in the coming months unlikely.
JPMorgan’s Assessment
According to JPMorgan strategist Nikolaos Panigirtzoglou, the chances of a spot Ethereum ETF being approved by May are 50% or less. For the SEC to approve such an ETF, it would likely need to categorize Ethereum as a commodity first, similar to how it has classified Bitcoin.
Panigirtzoglou believes this reclassification is “far from given” and that the SEC continues to view all cryptocurrencies besides Bitcoin as securities. Last year, JPMorgan said US lawmakers could potentially put Ether into a new “other” category to avoid classifying it as a security.
SEC Chair’s Comments
SEC Chair Gary Gensler reiterated last year that tokens using staking protocols like Ethereum’s ETH token could be considered securities under US law. During a Congressional hearing, Gensler refused to explicitly state whether ETH was a security.
After approving Bitcoin ETFs this week, Gensler said that decision should not indicate the SEC’s willingness to approve crypto asset securities.
Analysts’ Differing Opinions
Some analysts, such as Bloomberg Intelligence’s James Seyffart, are more optimistic than JPMorgan about the prospect of a spot ETH ETF approval.
The SEC was compelled to approve Bitcoin ETFs after previously approving Bitcoin futures ETFs and losing a court case related to the Grayscale Bitcoin Trust and its ETF conversion attempt.
Several firms, including BlackRock and Fidelity, have recently filed for spot ETH ETFs. The fate of these applications remains uncertain given the SEC’s hesitancy thus far.
