As the May deadline for the consideration of Ethereum (ETH) Exchange-Traded Funds (ETFs) approaches, analysts are offering differing opinions on the potential for litigation if the ETFs are rejected. While some believe that lawsuits are unlikely, others anticipate a legal battle to seek approval for spot ETH ETFs.

Bloomberg ETF analyst, Eric Balchunas, contends that Grayscale, a major digital asset management firm, is unlikely to pursue litigation if the ETH ETFs face rejection. Balchunas highlights the relatively small market share of ETH ETF futures compared to Bitcoin (BTC) futures, stating, "A lot of people assuming Grayscale (or someone) will sue SEC after they reject the Ether spot ETFs. I would question this as Ether futures only ETFs have 4% of the assets that Bitcoin futures have."

However, JPMorgan analysts hold a contrasting view. They anticipate that if spot ETH ETFs are not approved in May, a litigation process will likely follow. Nikolaos Panigirtzoglou, lead analyst at JPMorgan, expressed optimism about the eventual approval of spot ETH ETFs, stating, "If there is no spot Ethereum ETF approval in May, then we assume there is going to be a litigation process after May."

Executives from potential ETF issuers, such as VanEck and CoinShares, have voiced pessimism regarding the approval prospects for May. VanEck CEO, Jan van Eck, compared the BTC ETF approval process to the filing for an ETH ETF, suggesting that the outlook for Ethereum is bleak. Meanwhile, CoinShares CEO Jean-Marie Mognetti expressed doubt that an ETH ETF would be approved this year.

In late March, Grayscale Chief Legal Officer, Graig Salm, remained optimistic about the approval prospects for May. However, he cautioned against assuming any specific outcome based on the regulator's lack of engagement.

As the market eagerly awaits the decision on spot ETH ETF applications, the possibility of litigation remains uncertain. It remains to be seen if any party, including Grayscale or other potential issuers, will take legal action if the ETFs are rejected in May.