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JPMorgan Executive Gives 50-50 Odds on Ethereum ETF Green Light

In a significant development for the cryptocurrency market, a top JPMorgan executive has cast doubt on the likelihood of securities regulators approving a spot Ethereum exchange-traded fund (ETF) in the coming months. Nikolaos Panigirtzoglou, a key figure at JPMorgan, expressed a cautious stance, suggesting that the approval hinges on the Securities and Exchange Commission (SEC) classifying Ethereum as a commodity rather than a security.

Panigirtzoglou conveyed his perspective to The Block on January 12, emphasizing that the chances of the SEC categorizing Ethereum as a commodity are uncertain. “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,” he stated. “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.”

This revelation comes hot on the heels of the SEC’s groundbreaking approval of spot bitcoin ETFs earlier this week, a move that marked a significant shift after over a decade of rejections. Traders and investors are now eyeing Ethereum as the potential next candidate for ETF approval, given its recent surge in value—nearly 20% in the last seven days, dwarfing bitcoin’s more modest 2.5% gain during the same period.

However, Panigirtzoglou tempered expectations by highlighting the SEC’s continued stance on cryptocurrencies other than bitcoin. He emphasized that the regulatory body is “still signaling that it continues to view all other cryptocurrencies outside bitcoin as securities.”

JPMorgan’s cautious outlook is not new. Last year, the financial institution suggested that U.S. lawmakers might create a new “other category” to sidestep categorizing Ethereum as a security. The debate surrounding Ethereum’s classification has been ongoing, with SEC Chair Gary Gensler noting that tokens using staking protocols, such as Ethereum’s ETH token, could be considered securities under U.S. law.

During a lengthy hearing with lawmakers last year, Gensler refrained from definitively stating whether ETH was a security. Earlier this week, while approving spot bitcoin ETFs, Gensler clarified that the decision “should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.”

Despite JPMorgan’s skepticism, some analysts, including Bloomberg Intelligence’s James Seyffart, remain more optimistic about the prospects of spot Ethereum ETFs receiving approval. The divergence in opinions underscores the complexity and uncertainty surrounding the regulatory landscape for cryptocurrencies, with market participants eagerly awaiting the SEC’s decision in the coming months. The fate of spot Ethereum ETFs hangs in the balance, leaving both investors and industry experts on edge as they navigate the evolving regulatory environment.

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