JPMorgan sees no more than a 50% chance of Ethereum ETF approval until May.

JP Morgan is not very confident that the Securities and Exchange Commission will stay away Ethereum ETH

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The exchange-traded fund is expected to be approved in May, the first deadline for approving such funds.

“If the SEC is to approve a spot Ethereum ETF in May, we believe it will have to classify Ethereum as a commodity (similar to Bitcoin) rather than a security,” JPMorgan’s Nikolaos Panigirtzoglou told The Block. “This is by no means a given and I wouldn’t put it above a 50% chance that the SEC will classify Ethereum as a commodity before May.”

Earlier this week, the SEC approved a spot Bitcoin ETF after more than a decade of rejection. With the price of Ethereum surging nearly 20% in the past seven days compared to Bitcoin’s 2.5% rise over the same period, traders are now betting that a spot Ethereum ETF could be next in line to receive approval.

However, according to Panigirtzoglou, the SEC “continues to signal that it continues to consider all cryptocurrencies other than Bitcoin to be securities.”

Last year, JPMorgan said U.S. lawmakers could potentially classify ether in a new “other category” to avoid classifying it as a security.

Staking Protocol

Last year, SEC Chairman Gary Gensler reiterated that tokens using staking protocols, such as Ethereum’s ETH token, could be considered securities under U.S. law. During a nearly five-hour hearing with lawmakers last year, Gensler refused to say whether ETH was a security. And while approving a spot Bitcoin ETF earlier this week, Gensler said the decision “should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.”

Some analysts, including Bloomberg Intelligence’s James Seyffart, were more optimistic than JPMorgan that a spot ETH ETF would be approved.

The SEC had to finally approve a spot Bitcoin ETF in part because it had already approved a Bitcoin futures ETF, and a federal court ruled that the SEC would block Grayscale’s attempt to convert the Grayscale Bitcoin Trust into an ETF. It was ruled that the rejection should be reviewed.

Several companies, including BlackRock and Fidelity, have recently applied for spot ETH ETFs.

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