JPMorgan: Approval of ETH-ETF Seen as Political Move Ahead of US Elections

JPMorgan analysts have described the SEC’s approval of spot Ethereum-ETFs as a political decision in the lead-up to the US presidential elections. This was reported by The Block.

“We view this ETF approval and cryptocurrency in a broader sense as an increasingly political issue ahead of the US presidential elections in 2024. Therefore, we expect spot ETH-ETF trading to commence well before November,” the report states.

On May 23, the SEC approved 19b-4 applications from issuers of spot exchange-traded funds based on Ethereum. Trading will begin once the agency signs off on S-1 registration statements. Bloomberg analyst James Seyffart stated that this will take “a couple of weeks, but maybe longer.”

The approval of the ETH-ETF followed the exclusion of staking from applications. On May 10, ARK Invest and 21Shares made such a decision, followed by Fidelity on May 21. According to JPMorgan analysts, staking is a key issue between issuers and the SEC due to the asset’s status under the Howey Test.

Experts also mentioned the FIT21 bill, which the US House of Representatives passed a day before the Commission approved the ETH-ETF. Previously, SEC Chairman Gary Gensler criticized it.

“However, the bill’s chances of passing the Senate are lower, and the [US President Joe] Biden administration has stated it does not support it, though it has not yet threatened a veto,” the JPMorgan report notes.

Before the ETH-ETF approval, Bernstein analysts predicted Ethereum could rise to $6600 if the SEC made a positive decision.

Following the approval, Standard Chartered’s Head of Research Geoffrey Kendrick suggested a new phase for exchange-traded funds in 2025. In his view, SOL and XRP are next in line.