JP Morgan has raised doubts regarding the possible approval of new crypto spot ETFs in the USA, particularly concerning Solana.
At the beginning of this year, the SEC approved spot Bitcoin ETFs, and last week it also approved spot Ethereum ETFs.
Now many are expecting the approval of spot ETFs on other cryptocurrencies as well, but there are doubts that this might happen.
The doubts of JP Morgan about ETFs on Solana
Yesterday the CEO and global market strategist of JP Morgan, Nikolaos Panigirtzoglou, stated that the investment bank doubts that the SEC will approve other crypto ETFs in the future, due to the fact that the agency believes that many cryptocurrencies are actually unregistered securities and not commodities.
He said:
“We doubt it. The SEC’s decision to approve ETFs on ETH is already forced, given the ambiguity on whether Ethereum should be classified as a security or not. We do not think that the SEC would go further by approving Solana or other crypto ETFs, given that the SEC has a stronger opinion (compared to Ethereum) that tokens outside of Bitcoin and Ethereum should be classified as securities”.
According to Panigirtzoglou, the situation could be unlocked, in the short term, only if US politicians approve new crypto regulations that declare that most criptovalute should not be considered securities. Currently, no such regulation exists yet.
Security and commodity: according to JP Morgan there will be no ETFs on Solana
Sul fatto che Bitcoin sia una commodity, e non possa essere considerata una security, praticamente nessuno ha dubbi.
In fact, the SEC in recent years had rejected requests for the issuance of ETFs on BTC spot on US exchanges for other reasons, and it has never been completely against Bitcoin.
Tuttavia già per quanto riguarda Ethereum la questione si fa più complicata.
In fact, the SEC seemed to want to consider Ethereum an unregistered security, and not a commodity, particularly because of staking.
The so-called security are investment contracts that foresee that the buyer simply gives their money to the offeror in exchange for the promise of a return, in turn generated by the work of the same offeror.
Il protocollo Bitcoin non prevede nulla di tutto ciò, e nemmeno gli exchange promettono rendimenti dal mero acquisto di BTC.
Instead, ETH staking indeed provides a yield, but the Ethereum protocol does not require staking to involve a contract between two parties. It only requires that anyone can download and install a validator node on which to stake their own ETH. Since there are no counterparties, this cannot be considered an investment contract.
The discourse changes only for the so-called staking-as-a-service, that is when an ETH holder gives their tokens to a third party so that they can stake them, but this has nothing to do with the Ethereum protocol: it is a service provided precisely by third parties.
The altcoin
The discussion becomes much more complicated when abandoning decentralized crypto projects and delving into those that are a bit more centralized.
In this context, the reference case for now is that of XRP.
In fact, a U.S. judge has ruled that XRP, when traded on secondary markets (i.e., on exchanges), cannot be considered an investment contract because the seller does not promise gains to the buyer.
However, there remains an unresolved upstream problem.
XRP is a cryptocurrency created by Ripple, and it was initially sold by the company promising returns. This aspect is still under review by the U.S. judicial authorities, who have yet to determine whether XRP was initially sold by Ripple on the primary market as a security, or not.
At this point, any cryptocurrency that was initially sold with a promise of profit could theoretically be at risk of being considered, at least initially, as an unregistered security.
It is worth noting that even ETH was initially sold, through an ICO that took place in 2015, but without specific promises of returns.
La questione è ancora aperta, e secondo il CEO di JP Morgan potrebbe indurre la SEC a non essere disposta ad approvare altri ETF crypto spot oltre a quelli su BTC e ETH.
The future
These, however, are considerations that apply only in the short term.
In fact, by the end of 2024, or at the latest 2025, some new developments could materialize that could radically change the picture.
The first, of course, are the presidential elections, which will be held on November 5 in the USA.
In case of a victory by Donald Trump, it seems that the situation for cryptocurrencies in the USA could become more favorable, while in case of Joe Biden’s reconfirmation, the uncertainty would continue.
Furthermore, the United States Congress is already discussing the approval of a new regulation specific to cryptocurrencies, and if this were to be approved, the framework could be greatly simplified.
The biggest problem is that there is no regulatory clarity regarding the crypto sector in the USA, while for example the European Union already last year equipped itself with a certain regulatory framework.
To tell the truth, the new cryptocurrency laws in the USA in this 2024 have undergone an acceleration, given that they were practically stalled since 2021, and it is not to be excluded that by the end of the year, or in 2025, they will be approved.
At this point, it is very likely that the entire discussion about the new crypto ETFs will be postponed at least until after the elections, and perhaps even until after the approval of the new regulations.
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