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JP Morgan Optimistic Ethereum Will Avoid Security Label

The American multinational bank JPMorgan acknowledged that the Ethereum network is realizing more decentralization as Lido shares in the staked ETH decline. The JPMorgan analysts waded into the contested classification of Ethereum as either a commodity or security. 

Analysts drawn from JP Morgan are optimistic that Ethereum will likely avoid the security designation, citing the project’s decentralization. The analysts illustrated on Wednesday, April 3, a significant drop in the amount of Ethereum staked. 

The report highlights a positive development realized by the Ethereum network by sustaining decline in Lido’s share in the staked ETH. Lido has seen its share dip from a third 12 months ago to the present quarter. 

Ethereum Overcoming Decentralization Concerns in Staked ETH

JPMorgan analysts indicated that the decline in Lido’s share should calm concentration concerns within the Ethereum network. It raises the chances of Ethereum avoiding the security designation. 


Staking involves a crypto world concept where users pledge their assets to the network to bolster its continuity. Staking in Ethereum is critical since it runs on the proof-of-stake (POS) blockchain, where validators secure the network. Such differs from the proof-of-work (POW) blockchain, such as Bitcoin, where miners are responsible for ensuring the network. 

JPMorgan analysts reporting declined Lido share calms the concerns of increased centralization. The problems emerged since its transition to the PoS, allowing the centralized entities, including Kraken, Binance, Lido, and Coinbase, to account for the most stake. 

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JPMorgan analysts observed that the Gary Gensler-led Securities and Exchange Commission (SEC) had previously excluded tokens on the sufficiently decentralized network from the securities label. The SEC cited the absence of a controlling group.  

Ethereum Classification Key to Spot Ethereum ETFs Approval

JPMorgan analysts consider the Ethereum classification essential as the SEC currently faces multiple applications of hopeful issuers of spot Ethereum exchange-traded funds (ETF).  

The SEC recently enforced actions against crypto companies, alleging contravening federal laws. The watchdog alleges they sell unregistered securities. 

JPMorgan’s optimistic prediction of Ethereum coincides with the federal regulator urging public comment on the bids from three leading players to enter the spot ETH ETF space.

 The SEC concluded its series of delays with a Tuesday, April 2, invitation for public comment on bids from Fidelity, Bitwise, and Grayscale Investments in a three-week window. 

The invitation of public comment constitutes a standard element in the procedure to approve fund managers’ bids for an ETF. SEC utilized a procedure similar to the spot Bitcoin ETF bids, allowing citizens and organizations to voice opinions on the viability of the proposed investment products. 

Outlook on Ethereum Market Activity

Meanwhile, Ethereum saw the daily trading volume soar 4.10% to test $15.894 billion in the past 24 hours. The increase signals elevated market activity for Ethereum despite trading at $3,238.96 – $3,436.89 in the past 24 hours, as per CoinGecko. 

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Ethereum is down 1.4% in the past 24 hours to exchange hands at $3,281.14. The decline has seen total market capitalization dip to $393.459 billion. Unlike Bitcoin that set an all time high price in March, Ethereum failed to regain its November 2021 levels. Currently, Ethereum is 32.6% from the $4,878.26 as per CoinGecko data. 

Ethereum’s 8.20% price decline shows it is underperforming relative to the global crypto market, which has been down 5.3% in the past seven days. Still, Ethereum is 12.6% down in the 30-day run, as per CoinGecko. 

Editorial credit: Konektus Photo /

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Stephen Causby

Stephen Causby is an experienced crypto journalist who writes for Tokenhell. He is passionate for coverage in crypto news, blockchain, DeFi, and NFT.

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