Analysts are split on the potential for litigation following a potential rejection of an Ethereum (ETH) ETF in May. While approval odds for an ETH ETF in May are low, some are speculating about the aftermath of a rejection. The question arises whether Grayscale would sue the SEC, similar to their actions in 2022 when a Bitcoin (BTC) ETF application was rejected.
Bloomberg ETF analyst Eric Balchunas believes that Grayscale is unlikely to pursue litigation if ETH ETFs are rejected in May. Balchunas points out the limited market share of ETH ETF futures compared to BTC, suggesting that any potential legal battle may not be worth the effort and resources. On the other hand, JPMorgan analysts anticipate the possibility of litigation if an ETH ETF is rejected in May, setting up conflicting views within the industry on the next steps.
Despite uncertainties surrounding the approval of an ETH ETF in May, executives from potential issuers like VanEck and CoinShares are pessimistic about the outcome. While some remain confident in the approval process, the lack of engagement from regulators adds to the ambiguity. It remains to be seen whether any party will take legal action if ETH ETF applications are turned down in May.