JPMorgan: Market’s initial reaction to spot Ethereum ETF may be negative

Golden Finance reported that the U.S. Securities and Exchange Commission (SEC) approved a spot Ethereum exchange-traded fund (ETF), raising expectations of significant inflows. However, JPMorgan warned that these hopes may be overly optimistic compared to spot Bitcoin ETFs. JPMorgan analysts outlined several reasons for their cautious outlook. They detailed Bitcoin's "first-mover advantage" and the recent halving event as important demand catalysts for Bitcoin ETFs, which Ethereum lacks. Noting that Ethereum's proof-of-stake mechanism does not provide a similar demand boost, the analysts stressed that the Bitcoin halving event "acted as an additional demand catalyst for spot Bitcoin ETFs."

In addition, they pointed out that the exclusion of staking in the spot Ethereum ETF application makes these funds "less attractive than platforms that offer staking returns." Bitcoin's position as a competitor to gold in portfolio allocation further increases its demand for Ethereum, which is primarily seen as an application token. In addition, JPMorgan detailed that Ethereum's lower liquidity makes it less attractive to hedge funds and quantitative funds.