JP Morgan analysts have expressed uncertainty regarding the approval of a spot Ethereum exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC) next month. Citing the SEC’s recent actions against Ethereum-related entities, the analysts noted a pessimistic outlook for approval in a note released on Thursday.

The findings highlighted the SEC’s investigation into firms associated with the Ethereum Foundation, a non-profit organization supporting the Ethereum ecosystem. While the SEC did not confirm the investigation, JP Morgan analysts interpreted this development as further evidence that the chances of spot Ethereum ETF approval by May are no higher than 50%.

If an Ethereum ETF is not approved by the upcoming deadline, the report suggests that applicants are likely to take action against the regulator. The analysts also expressed a belief that the SEC may eventually lose legal battles, similar to the cases involving Grayscale and Ripple last year, leading to the eventual approval of spot Ethereum ETFs. However, they do not anticipate this happening as soon as May.

In a more optimistic perspective shared last month, JP Morgan analysts suggested that Ethereum could be classified as a commodity instead of a security due to its increased decentralization. JP Morgan is not alone in lowering expectations for Ethereum ETF approval. Bloomberg Intelligence ETF analysts previously stated that approval in the next month is unlikely.