News
JP Morgan Skeptical on Approval of Solana and Other Cryptocurrency ETFs
Despite the recent approval of Ethereum ETFs, JP Morgan analyst Panigirtzoglou doubts the SEC will approve ETFs for tokens like Solana without new legislation.
JP Morgan has expressed concerns about the Securities and Exchange Commission’s (SEC) approval of additional cryptocurrency Exchange Traded Funds (ETFs), particularly those involving tokens beyond Bitcoin (BTC) and Ethereum (ETH)
JP Morgan analyst Nikolaos Panigirtzoglou pointed out that the SEC approval process for Ethereum ETFs is already stretched thin, given the ambiguity surrounding Ethereum’s classification as a security.
Panigirtzoglou said The block that the SEC has not shown an aggressive stance towards approving crypto ETFs. He pointed out that the SEC’s cautious approach is rooted in the lack of legislative clarity regarding the status of most cryptocurrencies.
“We doubt the SEC would go even further in approving Solana or other token ETFs, given their stronger view that tokens outside of Bitcoin and Ethereum should be classified as securities,” Panigirtzoglou said.
Legislative obstacles
The absence of legislation that clearly defines most cryptocurrencies as non-securities remains a significant obstacle to further SEC approvals. Panigirtzoglou suggested that such legislation could change the regulatory landscape and pave the way for broader approvals of ETFs.
However, he acknowledged that no such legislation currently exists, making it unlikely that the SEC will approve token ETFs like Solana in the near future.
Differing opinions on the market
Despite JP Morgan’s skepticism, Geoffrey Kendrick of Standard Chartered Bank predicts that the Solana and XRP ETFs could be approved by 2025. This optimism contrasts with Panigirtzoglou’s cautious outlook.
Additionally, Jaret Seiberg of TD Cowen suggests that more crypto ETF offerings could emerge within a year, which could include a variety of crypto tokens.
On May 23, the SEC approved Forms 19b-4 from eight Ethereum spot ETF applicants, including Grayscale, Bitwise, BlackRock, VanEck, Ark 21Shares, Invesco, Fidelity, and Franklin. This approval was done in a unified order, with S-1 filings for these ETFs still awaiting SEC approval. Analysts expect these funds to begin trading in the coming weeks.