SEC To Delay Approval Of Spot Ethereum ETFs, TD Cowen Forecasts

The Securities and Exchange Commission is predicted to delay the approval of spot Ethereum ETH/USD exchange-traded funds (ETFs), according to investment bank TD Cowen.

What Happened: TD Cowen, as reported by The Block on Thursday, anticipates that the SEC will not greenlight Ethereum ETFs before the May approval deadline. The investment bank’s prediction rests on the assumption that the SEC will first want to glean insights from Bitcoin BTC/USD ETFs before it moves on to Ethereum or other digital tokens.

“Our expectation is that the agency will not be approving ETPs for other crypto tokens any time soon as we believe the SEC will want to gain experience from Bitcoin ETPs before it approves an Ethereum or other crypto token ETP,” wrote TD Cowen Washington Research Group, led by Jaret Seiberg, in a note.”The wait might not be as long as 26 months, but it likely would be after the election.”

Following over a decade of rejections, the SEC gave the thumbs up to spot Bitcoin ETFs. Now, traders are speculating if spot Ethereum ETFs could be next in line. Nevertheless, some financial institutions, including JPMorgan, have expressed reservations, arguing that the SEC would first need to categorize Ethereum as a commodity, akin to Bitcoin, as opposed to a security.

Why It Matters: TD Cowen interprets the SEC’s approval of Bitcoin ETFs as consistent with the cautious, measured approach of SEC Chair Gary Gensler towards crypto regulation.

It is worth noting that major corporations, such as BlackRock and Fidelity, have submitted applications for spot Ethereum ETFs, indicating a rising interest in this digital asset.

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